Kalshi Inc., a financial exchange and prediction market funded by highly prominent venture capital firms, has been forced to shut betting on the outcome of the alleged killer of United Health Group Inc. Executive Brian Thompson in an apparent breach of financial market regulations.

Thompson was murdered in New York on Dec. 4. The main suspect, Luigi Mangione, was arrested on Dec. 9 in Pennsylvania. Kalshi then started to take bets on Dec. 11 on Mangione’s outcome, including when he would be extradited to New York, whether he acted alone and whether he would be convicted or plead guilty.

According to Bloomberg, two days later, on Dec. 13, trading suddenly halted, with Kalshi telling customers that it made the decision ” after receiving notice from our regulators.”

Though no public statement has been made expanding on what that exactly means, the Commodity Futures Trading Commission, which regulates Kalshi, bans futures trading linked to crimes, including assassination, terrorism and war, if the agency decides the so-called events contracts are against the public interest.

Mangione-related contracts are still currently being traded on other platforms, notably Polymarket Labs Inc., which officially says it doesn’t take bets from users based in the U.S. but is under investigation for allegedly doing so.

There are two issues here, one regulatory and one moral. Whether the CTFC will take further action against Kalshi remains to be seen, but morally, betting on the outcome of an alleged murderer is poor taste, at the very least.

“People are betting on whether this person is allegedly responsible for the assassination of another human being and here we are desensitized to this and betting on whether he’ll enter a guilty plea,” Cantrell Dumas, director of derivatives policy at Financial Policy at think tank Better Markets, told Bloomberg.

That such dubious trades were being offered on a service funded by Sequoia Capital and Y Combinator, among others, may also fairly raise questions about the guidance offered by some in Silicon Valley and their morals. Per Tracxn, $36.1 million has been invested into Kalshi, but seemingly not a cent spent on someone with a moral compass to ask a simple question such as “Is taking bets on an alleged murderer a good look for our company?” or someone with regulatory experience to ask, “Is this legal?”

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