Prediction market platform Kalshi disclosed Wednesday that it fined and suspended three U.S. congressional candidates for five years each after they placed bets on their own election races, labeling the activity 'political insider trading.'

The cases involved Mark Moran, an independent candidate for Virginia's U.S. Senate seat who initially entered the Democratic primary; Matt Klein, a Democratic state senator seeking the Democratic nomination for Minnesota's 2nd Congressional District; and Ezekiel Enriquez, who competed in the Republican primary for Texas's 21st Congressional District. Kalshi detected the trades through newly implemented safeguards designed to block political candidates from trading on markets related to their own campaigns.

Moran received the largest penalty of $6,229.30 after trading about $100 on himself in two markets: one on individuals planning to run for office in 2026 and another on his own Senate candidacy. He initially acknowledged the violation but ceased communication and refused to settle, prompting disciplinary action from Kalshi. On X, formerly Twitter, Moran stated he placed the bet intentionally to draw attention to the platform, claiming, "I traded $100 on myself, knowing this would happen," and vowed to impose a 25% 'vice tax' on Kalshi if elected to help pay down the national debt.

Klein settled after wagering $50 in October on his own primary outcome, his first use of a prediction market. He paid $539.85 and accepted the suspension. Klein apologized publicly on X, calling it "a mistake" and advocating for more regulation of such platforms. Enriquez, who finished 11th in his primary behind a Trump-endorsed rival, cooperated fully after trading less than $100 on his candidacy. He agreed to a $784.20 fine and the ban.

Kalshi's enforcement blog post emphasized its commitment to fair trading under CFTC-approved rules, stating, "Just like in traditional financial markets, bad actors will try to cheat." The company noted that cooperation led to settlements in two cases, while non-cooperation resulted in harsher penalties. These incidents follow Kalshi's earlier efforts, including blocking politicians and athletes from relevant markets and opening over 200 investigations earlier this year.

Regulated by the Commodity Futures Trading Commission as a designated contract market, Kalshi allows users to trade contracts on event outcomes like elections. The actions come amid heightened scrutiny of prediction markets over insider trading risks, with states like California and New York recently restricting officials' use of inside information on platforms such as Kalshi and rival Polymarket.