On 25 February 2026, the US CFTC’s Division of Enforcement issued an Advisory on Enforcement Authority over Event Contracts following the public release of two enforcement cases involving misuse of non public information and fraud on KalshiEX, a designated contract market.
The cases involved a political candidate who traded on his own candidacy and a YouTube channel editor who traded on advance knowledge of video content. Kalshi imposed financial penalties and suspensions in both cases and reported them to the US CFTC. The Division’s advisory emphasised that while Kalshi’s internal enforcement programme handled these matters, the US CFTC retains full authority to police illegal trading practices on any DCM. Prohibited practices include misappropriation of confidential information in breach of a pre existing duty of trust and confidence, pre arranged non competitive trading and wash sales. These alleged acts violated prohibitions on misappropriation of confidential information in breach of a pre-existing duty of trust and confidence to the source of the information (commonly known as “insider trading”) pursuant to Section 6(c)(1) of United States Commodity and Exchange Act, and Regulation 180.1(a)(1) and (3).
The advisory establishes an enforcement baseline for prediction market integrity and reaffirms that DCMs are self regulatory organisations with independent obligations to maintain audit trails, conduct surveillance and enforce rules against prohibited practices. The advisory also serves notice to market participants that the US CFTC will investigate and prosecute violations where federal action is warranted.
(Source: https://www.cftc.gov/PressRoom/PressReleases/9185-26)
