When even popular video editors can engage in insider trading, Kalshi's fine exposes a dark side of the prediction market.

Author: Frank, PANews

On February 25, 2026, prediction market platform Kalshi fined a YouTube editor $20,397.58. This figure, accurate to the cent, constitutes the first publicly disclosed insider trading fine in the history of the prediction market industry.

The person penalized is Artem Kaptur, a visual effects editor for MrBeast, the world's biggest influencer. He invested approximately $4,000 in MrBeast-related YouTube event contracts on Kalshi, earning $5,397.58. However, this seemingly insignificant profit triggered an industry-wide regulatory signal, prompting the CFTC (Commodity Futures Trading Commission) to issue a formal enforcement advisory regarding prediction markets.

However, Kalshi is a KYC platform, so catching an editor trading under their real identity isn't difficult. The real question is: what happens if someone with the same information moves to Polymarket, which doesn't require identity verification? PANews analysis found that in the Polymarket contracts for the second season of MrBeast's reality show "Beast Games," the winning probability of the final champion was pushed to 94% by funds three weeks before the season ended, exhibiting textbook insider trading characteristics.

PANews will start with the punishment of Kalshi and combine it with Polymarket's on-chain data anomalies to deeply analyze how insider trading, in an era where "everything can be bet," has transformed from a Wall Street exclusive term into a gray game that even editing room assistants can participate in.

The first insider trading penalty in the prediction market

According to the disciplinary notice issued by Kalshi, Kaptur used his position at Beast Industries to trade event contracts related to the MrBeast channel between August and September 2025.

Kalshi's monitoring system detected extremely unusual statistical patterns: Kaptur achieved a "near-perfect winning percentage" in low-odds markets. Simultaneously, because Kalshi's trading data was completely public, multiple platform users also noticed this anomaly and proactively reported it. Triggered by these two factors, Kalshi froze Kaptur's account and launched an investigation. The final penalties were: confiscation of all illegal gains of $5,397.58, plus a punitive fine of $15,000, totaling $20,397.58, and a two-year ban from the platform.

Another, even more absurd case was revealed on the same day. Kyle Langford, a Republican gubernatorial candidate in California, placed a bet of approximately $200 on Kalshi betting on his election, and then directly posted a screenshot of the transaction on X to boast about it. Kalshi froze his account that same day, ultimately imposing a 5-year ban and a $2246.36 fine on him.

While the fines themselves were relatively small, their symbolic significance extends far beyond the monetary amount. On the same day, the CFTC issued a formal enforcement advisory, explicitly citing Section 6(c)(1) of the Commodity Exchange Act, indicating that both cases could constitute federal-level violations. CFTC Chairman Mike Selig stated on X, "Our exchanges are the CFTC's first line of defense against insider trading in prediction markets. If you attempt manipulation, fraud, or insider trading, we will find you and take action." This marks the first time a U.S. federal regulatory agency has issued such a direct warning regarding insider trading in prediction markets.

Beast Industries issued a statement saying it has a "zero-tolerance" policy towards insider trading by its employees and has launched an independent internal investigation. However, the company also advised Kalshi to communicate the investigation results more openly in the future.

However, all these efforts are based on one premise: Kalshi is a centralized KYC platform, where users' identities, bank statements, and IP addresses are readily available. Catching an editor transacting under a real identity doesn't prove much. The real question is: what if someone with the same information chose a platform that doesn't require identity verification and settles via anonymous wallets and USDC?

94% on Polymarket: Beast Games champion "spoiled" on the blockchain

Around the same time that Kaptur was penalized for earning over $5,000 on Kalshi, MrBeast was moving forward with another much larger project. The second season of the reality show "Beast Games," in partnership with Amazon Prime Video, premiered on January 7, 2026, with 200 contestants competing for a record-breaking $5.1 million prize. The season finale, which aired on February 25, revealed the ultimate winner: Player 167, formerly a U.S. Air Force pilot and former University of Pennsylvania wide receiver Tyler Lucas.

However, on Polymarket, this result appears to have been "published" as early as three weeks ago.

PANews, through analysis of odds changes in the "Who will win Beast Games Season 2?" contract on Polymarket, discovered an extremely unusual funding pattern. While the show still had a large number of contestants and the finals were far off, the Yes share representing Player 167 experienced a sustained influx of buy orders that could not be explained by normal market logic.

From a timeline perspective, the anomalies are clear and significant. From late January to early February 2026, before the show had even entered the latter half of the elimination rounds, Player 167's winning probability began to drastically deviate from fundamentals. By February 4th, three weeks before the finale, Tyler Lucas's winning probability had risen to 84%. By February 18th, just one week before the season finale, the implied probability of the contract was even more firmly pinned to over 94% by investors.

In stark contrast, other top contestants who shone on the show were almost entirely "priced at zero." In a reality show with 200 participants relying on physical and intellectual tests, without reliable inside information, it would be difficult for any rational investor to price a single contestant's chance of winning at over 90% by the middle of the elimination rounds.

The Reddit community and Polymarket comment section were already in an uproar. "The champion was basically spoiled by Polymarket," multiple posts bluntly stated. Community members drew parallels to the early leak of season one champion Jeff Allen, but this time the data patterns were even more blatant.

The odds themselves are merely a symptom. PANews conducted a full crawl and analysis of the on-chain transaction data for this betting platform, and the results revealed more direct evidence than the odds anomalies.

The entire Beast Games Season 2 betting market recorded 111,000 transactions involving 2,640 unique addresses. Among these 2,640 addresses, one statistic is particularly striking: 795 addresses traded only one player's contract throughout the entire betting market lifecycle—Player 167. The fact that they "coincidentally" selected only the eventual champion from among 25 players is a concentration far beyond what can be explained by normal betting logic.

PANews further extracted and cross-referenced the transaction history of all suspicious addresses across the entire platform, analyzing dimensions including: Beast Games trading volume, overall platform win rate, and cross-address correlation. Ultimately, 147 highly suspicious addresses were identified. Among them, 16 addresses exhibited textbook-level insider characteristics; they had only participated in Beast Games-related betting on the entire Polymarket platform and had no trading records in any other markets.

Of these 16 addresses, the most suspicious is "0xA1F3Cf8Ba7410956a2955D5300A9be7Ff1dBc07E-1767992471439," which participated in only 3 Beast Games sub-markets, profiting from all of them with a 100% win rate, accumulating a profit of $3,237. Several similar addresses exist; although individual profits are not high, their operations exhibit a high degree of similarity. This suggests that insider traders may have deliberately diversified their betting to reduce scrutiny.

In terms of scale, what's more noteworthy are the hybrid traders who made a fortune on Beast Games but didn't exclusively trade MrBeast. Their trading patterns further fueled suspicion. PANews discovered multiple "address clusters" that were highly synchronized in time and behavior. On January 27th, the largest trading day across the entire market (with a single-day trading volume of $44,547), the top-ranked suspect address completed all 12 transactions within 17 minutes, earning $11,830. Two anonymous addresses each executed a sell transaction within the same minute at 09:41 on January 30th, each profiting $3,542; the amount, time, and behavior were completely mirrored.

So, who has the ability to bet with such certainty mid-season? Sources point to a very limited group: Beast Industries' massive post-production team, the 200 players involved in the recording and their close social circles, and staff involved in scheduling and promotion (the investigation revealed multiple addresses with exceptionally high win rates focused on film and television contracts). Kaptur's trade on Kalshi only involved $4,000, yet he made over $5,000. However, on Polymarket, PANews alone tracked top suspected insider addresses that had accumulated profits exceeding $100,000, and this is likely just the tip of the iceberg.

It's a feature that's also unfair in this game.

Kalshi was able to seize $5,397.58 of illicit gains down to the cent because, as a regulated centralized exchange, all traders' identity information, bank statements, and IP addresses were fully visible to the audit team. However, on Polymarket, users only need to connect to decentralized wallets like MetaMask to trade; on-chain transactions are transparent, but the real identities behind the addresses remain anonymous.

A deeper disagreement lies in their philosophies. Robert DeNault, head of enforcement at Kalshi, explicitly defines information asymmetry as a violation that must be severely punished. Polymarket CEO Shayne Coplan, however, has publicly stated a completely different position: insider trading is a "characteristic, not a flaw," of market prediction.

The fact that the Beast Games championship was "spoiled" to 94% three weeks in advance on Polymarket is perhaps a direct result of this kind of arbitrage. For ordinary players who have no insider advantage, participating in such event predictions is essentially just being used as fuel to exploit others.

From a broader perspective, the original intention of market prediction was to transform collective wisdom into price signals. However, when it becomes a tool for large-scale insider trading, this unfair game may no longer reflect collective wisdom, but rather the shadow of information privilege.