Kalshi, the CFTC-regulated prediction market platform that lets users trade on real-world event outcomes like elections, sports, weather, and more, just closed a massive $1 billion funding round at an $11 billion valuation—its third raise in 2025 alone.

This skyrockets the company’s value from $2 billion in June to $5 billion in October, and now double that, fueled by explosive growth: November trading volume hit a record $5.8 billion, up 32% from the prior month, with sports bets especially parlays driving over 90% of recent activity.

The windfall catapults co-founders Luana Lopes Lara and Tarek Mansour—both 29 and MIT computer science grads—into billionaire territory. Each holds an estimated 20-25% stake, translating to a paper net worth of about $1.3 billion per person though some reports peg it closer to 12% based on dilution.

For Lopes Lara, a Brazilian-born former professional ballerina who danced in “Swan Lake” productions in Austria before pivoting to fintech with summer stints at Bridgewater and Citadel, this crowns her the world’s youngest self-made woman billionaire at 29—edging out Scale AI’s Lucy Guo (31) and pop icon Taylor Swift previously the benchmark at around $1.6 billion.

The round was led by crypto powerhouse Paradigm, with heavy hitters like Sequoia Capital, Andreessen Horowitz, ARK Invest, CapitalG (Alphabet’s growth arm), Meritech, IVP, Anthos, and Y Combinator piling in.

Proceeds will fuel brokerage integrations it’s already live on Robinhood and Webull, global expansions, content partnerships a CNN tie-up is reportedly in the works, and crypto pushes via Solana for tokenized event contracts.

Liquidity comes from pros like Susquehanna International Group, and partnerships span the NHL to StockX. It’s the only fully regulated U.S. player in a sector exploding post-2024 election where it nailed Trump’s win weeks early on $500M+ in bets, outpacing Polymarket’s $3.6B unregulated volume.

A fresh class-action lawsuit in New York accuses it of unlicensed sports betting and misleading users on peer-to-house dynamics, plus state-level scrutiny on contracts. Investors shrug it off—Y Combinator’s Michael Seibel calls it a “company with as much potential impact on the world” as any he’s seen.

The news is lighting up X, with Forbes’ post racking up buzz and users hailing Lopes Lara’s “brutal ballet to billionaire” arc as inspirational. In a prediction market twist, odds are high this is just the warmup for Kalshi’s global dominance.

Prediction markets are online platforms where people buy and sell contracts that pay out based on the outcome of future real-world events. They work like a stock market, but instead of trading shares in companies, you trade the probability of something happening—like “Will Donald Trump win the 2026 midterms?” or “Will Bitcoin hit $200k by December 31, 2026?”

“Will the Federal Reserve cut interest rates in March 2026?” Two types of contracts are created: Yes contract and No contract. Each contract costs between $0.00 and $1.00.If the contract is trading at $0.65 ? the market thinks there’s a 65% chance the event happens.

If you buy 100 “Yes” contracts at $0.65 and the Fed does cut rates ? each Yes contract pays $1.00 ? you make $100 ? $65 = $35 profit. If the Fed does NOT cut rates ? Yes contracts become worthless ? you lose your $65.

This is why prediction market prices are interpreted as crowd-sourced probabilities. Money where your mouth is. People who know the most or research the hardest can profit, so the incentives push prices toward the true probability.

24/7 real-time probabilities. Unlike polls that update weekly, prediction markets update instantly as news breaks. Cover almost anything. Elections, sports outcomes, economic data, Oscars, weather, wars, celebrity breakups, scientific discoveries, etc.

Used by hedge funds, journalists, and governments as leading indicators. Create liquidity for “information” itself. Can feel like gambling some states still ban or restrict them. Assassination markets or morally questionable events sometimes pop up on unregulated platforms.

Prediction markets turn “What do you think will happen?” into “How much are you willing to bet will happen?”—and the collective answer has proven remarkably accurate.

Connecticut Issues Cease-and-Desist Orders to Kalshi, Robinhood, and Crypto.com Over Unlicensed Sports Wagering

Connecticut’s Department of Consumer Protection (DCP) Gaming Division sent cease-and-desist letters to KalshiEX LLC, Robinhood Derivatives LLC, and Crypto.com, accusing them of operating unlicensed online gambling—specifically sports wagering—through “sports event contracts” on their prediction market platforms.

These contracts allow users to bet on outcomes of real-world events like sports games, which the state views as illegal gambling under its laws, rather than federally regulated financial derivatives.

The platforms must stop all advertising, promotion, offering, or availability of these contracts or any other unlicensed gambling products to Connecticut residents right away. They are also required to allow affected users to withdraw any funds held in their accounts.

Only state-licensed entities can offer sports wagering in Connecticut. The DCP argues that these prediction markets lack such licenses and expose users to risks like underage betting (under 21) and lack of protections against insider trading or irregular wagering patterns—standards enforced in licensed sportsbooks.

Commissioner Bryan T. Cafferelli emphasized that non-compliance could lead to civil penalties and potential criminal charges under state gaming laws. This action highlights growing tensions between state gambling regulators and federal oversight.

The platforms claim their products are CFTC-regulated “event contracts” or swaps under the Commodity Exchange Act, exempt from state gambling rules.

However, states like Connecticut, New York, and Nevada have pushed back, with courts (e.g., a recent Nevada ruling) siding against broad federal preemption of sports betting.

Kalshi alone has faced similar orders in at least eight other states this year, including Arizona, Illinois, and Ohio. The platform, where ~74% of bets involve sports markets, called the orders misguided and filed a federal lawsuit in Connecticut’s District Court seeking an injunction to block enforcement.

Spokesperson Jack Such stated: “Kalshi is a regulated, nationwide exchange for real-world events, and it is subject to exclusive federal jurisdiction. It’s very different from what state-regulated sportsbooks and casinos offer.”

Robinhood: A spokesperson defended their offerings as “federally regulated by the CFTC and offered through Robinhood Derivatives, LLC, a CFTC-registered entity, allowing retail customers to access prediction markets in a safe, compliant, and regulated manner.”

Crypto.com: No immediate public response as of December 4, 2025, though the company has been drawn into the prediction markets debate alongside its crypto services.

This crackdown could signal more state-level scrutiny on prediction markets, potentially affecting user access in Connecticut and influencing ongoing federal-state jurisdictional battles.

For Connecticut residents with open positions, the DCP advises monitoring accounts for withdrawal options and seeking help for gambling concerns via the state’s 24/7 helpline.

The situation remains fluid, with Kalshi’s lawsuit likely to test whether these platforms can continue operating nationwide under CFTC rules. Recent X discussions echo the regulatory divide, with users noting it as a “setback for prediction markets” and potential “massive implications for DeFi compliance.”

Connecticut residents must be allowed to withdraw funds from these platforms, but open positions may be frozen or settled under duress. This could lead to financial losses if markets are abruptly halted, especially for high-volume sports bets ~74% of Kalshi’s activity is sports-related.

The DCP highlights risks like underage access and lack of geofencing, potentially exposing users to scams or data breaches without state-mandated safeguards. Kalshi, Robinhood Derivatives, and Crypto.com must geo-block Connecticut IP addresses and halt all marketing there, reducing their U.S. user base by ~1-2% per platform.

Non-compliance risks civil fines up to $5,000 per violation and criminal charges under Conn. Gen. Stat. § 53-278e. Crypto.com, already pausing operations in Nevada, faces compounded costs for compliance tech upgrades.

This is the 11th state action against prediction markets in 2025 joining Arizona, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Jersey, New York, Ohio, and Pennsylvania.

A win for states could prompt copycat orders nationwide, fragmenting national platforms into a patchwork of compliant markets—similar to how sports betting legalization varies post-2018 PASPA repeal.

The U.S. Securities and Exchange Commission (SEC) must undertake a major regulatory overhaul, according to SEC Chair Paul Atkins, who used a major address at the New York Stock Exchange on Tuesday to call for a sweeping “reset” of disclosure requirements and a reduction of legal burdens faced by smaller companies.

Atkins’s vision, which seeks to “tilt the balance of power from investors back toward companies,” directly challenges the efficacy and necessity of numerous investor protection rules established after the 2008 financial crisis.

Atkins emphasized that the concept of financial materiality should be the “north star” of the SEC’s disclosure framework, arguing that too much mandated information is “unmoored from materiality” and only serves to confuse investors.

“When the SEC’s disclosure regime has been hijacked to require information unmoored from materiality, investors do not benefit,” Atkins stated in his prepared remarks, signaling the agency’s shift toward a deregulatory policy agenda.

Targeting the “Frankenstein Patchwork” of Executive Pay Rules

At the heart of Atkins’s reform target are the rules surrounding executive compensation, which he and other Commissioners have characterized as a “Frankenstein patchwork”—an overly complex and expensive regime that obscures rather than illuminates pay decisions. Atkins and fellow Republicans are explicitly aiming at several key provisions mandated by the Dodd-Frank Act of 2010

The most highly publicized target is the requirement for companies to disclose the ratio of CEO compensation to the median pay of all other employees. Critics, including Atkins, argue this figure is arbitrary and misleading because it varies wildly based on factors unrelated to management performance, such as whether a company employs more part-time, seasonal, or international workers. For instance, the average CEO-to-worker pay ratio at S&P 500 companies stood at 285 to 1 last year, a number Atkins and corporate leaders argue has created “envy, not moderation,” citing Warren Buffett, who noted the rules helped drive up CEO pay by allowing them to benchmark themselves against disclosed figures.

This rule mandates that companies clearly describe the relationship between executive compensation “actually paid” and the company’s financial performance. Many believe that the complexity of the required formula often results in a metric that is disjointed from the total compensation reported in other tables, imposing high compliance costs without providing clear, decision-useful information to shareholders.

Atkins is also pushing to revise the detailed compensation tables, including potentially eliminating the complex Option Exercise and Stock Vested Table and increasing the disclosure thresholds for executive perquisites (perks). Some critics lament that the detailed disclosure of perks—like security expenses or corporate jet usage—is “salacious” and detracts from the material financial picture.

Easing the Regulatory Burden on Small Business

A second major pillar of the SEC Chair’s reform agenda is providing relief to smaller companies, arguing that the current compliance burdens act as a barrier to capital formation and growth.

“The last comprehensive reform to these thresholds took place in 2005,” Atkins said, denouncing this as a “dereliction of regulatory upkeep.”

Under the current system, a company with a public float as low as $250 million is subjected to the same exhaustive disclosure requirements as a company 100 times its size. Atkins indicated the SEC would look to “right-size” disclosure obligations, making them scale with a company’s size and maturity, and potentially expanding the grace periods available to newly public companies to incentivize more Initial Public Offerings (IPOs).

However, critics, particularly Democrats, warn that this deregulatory agenda risks dismantling essential investor protections put in place following the 2008 financial meltdown, when executive compensation practices encouraged excessive risk-taking. Concerns remain that Atkins’s approach—combined with a declining SEC workforce—will weaken the agency’s ability to police financial markets, potentially allowing risk and misconduct to build up in the system.

The stage is now set for a major political and legal confrontation as the SEC begins to formally revise rules rooted in one of the most significant pieces of financial legislation in modern history.