Kalshi announced Wednesday that it fined and suspended three congressional candidates for trading on their own election outcomes, the prediction-market platform's first major enforcement action against politicians wagering on their own races.

The penalties hand Kalshi a test case as prediction markets fight for mainstream legitimacy. The company is now policing candidates directly, but the fines run from $539.85 to $6,299.30 — figures that Rep. Mike Levin says barely register as deterrents. Each candidate also drew a five-year platform ban.

"Just like in traditional financial markets, bad actors will try to cheat. Regulated exchanges must constantly evolve and adapt their systems to address insider threats," Kalshi said in a news release.

Klein's $50 trade

Kalshi's surveillance system flagged Minnesota state Sen. Matt Klein, a Democrat running for an open U.S. House seat in the state's 2nd Congressional District. Klein wagered $50 in October that he would win the nomination, his first experience with prediction markets, according to the Grand Junction Sentinel.

"This was a mistake, and I apologize," Klein wrote, calling for "clearer rules and regulations on prediction markets." He accepted a $539.85 fine and the five-year suspension.

Enriquez's quiet exit

Ezekiel Enriquez, who ran in the Texas Republican primary for Texas's 21st Congressional District, placed a bet under $100 on his own candidacy. He lost the March primary with less than 2 percent of the vote. Enriquez cooperated with Kalshi's investigation and settled, paying $784.20 and accepting the five-year ban. He could not be reached for comment, the Grand Junction Sentinel reported.

Moran's protest trade

Mark Moran, an independent candidate for Virginia's U.S. Senate seat, drew the largest penalty at $6,299.30. Moran began trading on his own candidacy with a wager that he would announce his run in October, months before he formally launched in January. He disclosed on social media that he "traded $100 on myself."

Moran told CNN he "wanted to get caught" to raise awareness about illegal gambling. He told the Associated Press he intended the bets to highlight concerns about platforms' influence on elections. On social media, Moran wrote that he placed the bets to "highlight how this company is destroying young men." He refused to sign a settlement requiring a statement on X, which contributed to his higher fine, according to KSAT.

The critics

Levin characterized the punishments as "a parking ticket" rather than serious consequences. Kalshi and Republican members of Congress had not publicly weighed in on Levin's criticism by press time.

What's next

The three cases follow a February round in which Kalshi opened 200 investigations into insider-trading concerns and removed two users from the platform. Bipartisan calls for federal oversight of prediction markets have grown as Kalshi and rival Polymarket expand their election-contract offerings heading into the fall campaign.