Kalshi, a U.S.-regulated prediction market, finds itself in the midst of controversy after Pirate Wires published an explosive report revealing that the platform allegedly paid social media influencers to publicly target its competitor, Polymarket. The report claims Kalshi sought to capitalize on a recent FBI raid at Polymarket CEO Shayne Coplan’s home, encouraging influencers like former NFL player Antonio Brown to make disparaging comments about Coplan. Brown’s tweet included a controversial remark suggesting Coplan was “guilty” of unspecified crimes, and another influencer drew misleading comparisons between Coplan and the disgraced FTX founder, Sam Bankman-Fried. These actions have raised ethical concerns, particularly because Kalshi positions itself as a regulated entity.
This report has sparked a backlash on social media, with industry figures like Jeff Park, head of alpha strategies at Bitwise Investments, calling Kalshi out for what he described as “moral hypocrisy.” To complicate matters, shortly after the Pirate Wires article, rumors began circulating on social media suggesting that Kalshi itself was under investigation by U.S. regulators, including the Federal Trade Commission. However, these allegations remain unverified, and the FTC has not confirmed any investigation into the company.
This drama unfolds at a crucial time for prediction markets, which are seeing a resurgence in interest and scrutiny. The markets gained significant credibility during the 2020 U.S. presidential election and could receive regulatory boosts under a new U.S. administration. While Kalshi’s legal battles with regulators, including the U.S. Commodity Futures Trading Commission, have already tested the platform’s resilience, the unfolding scandal may impact its future prospects in an increasingly competitive industry.
