Kalshi and Donald Trump Jr. mutually agreed to terminate the advisory contract after his venture capital firm invested heavily in rival prediction platform Polymarket. Internal discussions surrounding the potential conflict of interest originally commenced back in August following the initial investment announcement. The development unfolds as Democrats secure majorities in both congressional chambers, setting the stage for tighter regulatory measures across the prediction market sector.
Key points
The advisory relationship concluded due to a mutual determination of an emerging conflict…: The advisory relationship concluded due to a mutual determination of an emerging conflict of interest.
Prediction market companies are facing an environment of potentially stricter regulations…: Prediction market companies are facing an environment of potentially stricter regulations under incoming congressional majorities.
Venture capital moves can quickly complicate high-profile advisory relationships across c…: Venture capital moves can quickly complicate high-profile advisory relationships across competing financial platforms.
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Prediction market platform Kalshi ended its advisory contract with Donald Trump Jr. in response to his venture capital firm, 1789 Capital, also holding a stake in rival platform Polymarket, according to Kalshi's spokesperson.
It was a mutual arrangement, the spokesperson said, with conversations on the Trump Jr.'s exit beginning in August after 1789 announced a major stake in Polymarket. Both the platform and Trump Jr. agreed it was a conflict of interest to keep the president's son as an advisor while serving as a top investor for Polymarket, the spokesperson added.
His departure comes after Democrats secured a majority in the House and Senate. The party is expected to crack down on the prediction market industry. Reuters first reported Trump Jr.'s departure.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
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