Kalshi taps former FBI agent to fight against money laundering

Kalshi, a leading prediction market company, has hired a former FBI agent to run its first anti-money laundering team as prediction markets come under increasing legal scrutiny by state and federal regulators.

Sean Fern will work closely with law enforcement and regulators and senior staff at Kalshi to keep an eye on suspicious and potentially criminal activity on the platform, which has exploded in growth in the past year.

According to the firm TickerTracker, Kalshi has crossed $260 billion in bets so far this year, already triple the amount traded in all of 2025.

In an interview with NPR, Fern, who worked as a federal prosecutor in Brooklyn before his time at the FBI, said his aim is to build defenses against people trying to use the platform to commit financial crimes.

"I want to make sure it's a hard place to launder money or evade sanctions and commit fraud," Fern told NPR on Friday. "On a day-to-day basis, that involves knowing who our customers are, knowing where their money comes from, and making sure we aren't doing business with sanctioned entities or parties," he said. "And when something looks off or looks suspicious, we can catch it and make referrals to law enforcement."

The announcement echoes what cryptocurrency companies did during that sector's boom times in the early 2020s. The cryptocurrency exchange Binance, for instance, hired former federal prosecutors and FBI agents to beef up its compliance and anti-money laundering divisions. Several years later, Binance's founder Changpeng Zhao pleaded guilty to money laundering charges.

Avoiding its own money laundering scandal, Fern said, is the reason Kalshi tapped him.

At the FBI, Fern was a special agent in the bureau's international corruption squad, where he helped lead the investigation into the multibillion-dollar bribery scheme tied to Malaysia's sovereign wealth fund, a scandal that became known as 1MDB.

Kalshi hopes adding Fern will lend credibility to the surging platform as it faces mounting scrutiny over insider trading and market manipulation.

Prediction market bettors can place wagers on everything from sports to what politicians say at public events to the outcome of elections. Experts have warned that introducing betting into domains like voting and policy decisions encourages people to monetize insider information.

Federal regulators and law enforcement in Washington have launched criminal investigations into alleged abuse on prediction market platforms. Earlier this year, regulators settled with former U.S. Rep. George Santos over market manipulation. Federal prosecutors have also indicted a former U.S. Army soldier and a former Google employee for allegedly using non-public information to cash out on Polymarket, Kalshi's main rival. In August, President Trump's former teleprompter operator was fined by regulators for using advance notice of the president's speeches to profit on Kalshi's so-called "mention markets."

Elisabeth Diana, a Kalshi spokeswoman, said that as banks, hedge funds and other financial institutions use Kalshi, the need to shore up financial crime safeguards has become apparent. "We are growing up," Diana said.

The company, which PitchBook estimates to be worth around $40 billion, has 250 employees, and it plans to double its headcount over the next six months.

During his time in federal law enforcement, Fern was one of the lead prosecutors in the trial of OneTaste, an "orgasmic meditation" wellness company whose founders were sentenced to prison following convictions for forced labor conspiracy.