Yeah, I mean a few things. Let me address the moral hazard because I think it's a bit easier and then I'll get to insider trading. So, there's a bunch of regs that essentially prevent moral hazards like violence, war, terrorism, assassinations, etc. Like those have never been listed, including wildfires. We've never listed wildfires. Those have been listed offshore, on prediction markets that are unregulated that run offshore. And that's one of the challenges that we've had.
And I always say this, and I say this pretty publicly at this point: I like competition. I love competing with Robinhood and Coinbase. Now Goldman is entering the space. There's so many. Competition is good. An industry doesn't really become an industry without competition. The things that I've always struggled with a little bit with one of our big competitors, Polymarket, is I think we have principled differences. I think they went offshore, did unregulated, and then the results show like they listed some of these missile strike markets, etc. They have really infuriated people for good reason. They infuriate me, too. They're bad markets that shouldn't exist because they present moral hazards. So, really the line there is like, you know, there are regs that ban them, and we shouldn't allow any operators to do these types of things. And if there are certain markets that are on the line, my view is we should be conservative and not let them happen.
Now, insider trading is a more interesting issue, and I always go back to initially at the beginning of the year when the first insider trading case, which is the famous Maduro trade, happened. You know, there was a bit of a debate in the industry. Like, we came out very strongly saying, 'We spent the first four years building systems to ban insider trading, and we're very against insider trading.' And some of the industry players who've now come around initially were saying, 'Well, actually no, we should let insider trading happen because it makes market prices more efficient. Like, if you let insiders trade on the information that they have, it should in theory make the market prices more efficient.' And I mean, it's a completely moronic take, basically, because like, you know, there's sure theoretically that would happen. But what would happen if you let corruption go rampant in a supposedly free and fair competition? People stop believing it's fair. And what happens if people stop believing it's fair? They stop participating. The thing breaks. People stop using it. And that's why it's banned in the stock market, it's banned in traditional markets, it's banned in prediction markets.
There's a few layers. I mean, one is we verify all customers. So, when you onboard to Kalshi, we take your name, social security number. Two is we send it to a bunch of vendors that usually the banks use. So, after the Bank Secrecy Act was enacted, banks have a duty, the same way as a regulated exchange like us, we have a duty to figure out who we're transacting for, who we're moving money for, so who the customers are. And then you can cross-validate against a bunch of lists. So, FEC reports, politically exposed people, their families, their close families. And there's all sorts of lists now also with sports leagues. We just announced a partnership with the NBA. The core tenet of that partnership is they share data with us about who may be an insider in the league, so we can ban them from trading. And then we ban all of these people from trading on things that they might have insider information or influence over. That ban is actually a self-regulation. That's not currently law. We're pushing for this to be law. I'm strongly advocating for this to become law.
But what's law is also after the trade, like post the fact, which we had discussed last time. After a trade happens, the thing that's interesting with fraud is like there's always something suspicious. Like, somebody, you know, all of a sudden is buying in larger size, something that's an asymmetric long shot, or other things. And then that goes to our investigation team that can impose fines all the way to criminal prosecution. And the way to really combat crime or bad actors is you catch them. And when you catch them, you have to enforce heavy consequences. And that's like true for any financial crime or any crime really on the street. And so the next person that considers doing it is going to reconsider it because of how bad it would be for them to get caught.
Now, here's the thing I will say about prediction markets. I'm sure a lot of you have seen, especially the young people in the room, you know the meme about the plane from World War II around survivorship bias, where like, you know, the plane was shot certain places and we make the completely wrong conclusion about where we should shoot the plane or not shoot the plane. Like I think it's a bit what's happening in prediction markets. The thing is prediction markets are incredibly transparent. All the trading activity is public. You see it. Everybody sees it. You can go to kalshi.com right now, click on, you know, Texas Senate race or any race or whatever you want to click on, and you see all the trading activity publicly available as a log for anyone. Which is not really true for traditional markets. You cannot easily — reporters and press and the general public and our customers cannot see it so publicly.
And so it's interesting because there's way more trading happening in the stock market. We're just catching way less of it. Whereas in prediction markets, we're just actually catching much more of it because it's so blatant. It's right there for everybody to see. When somebody, you know, is moving the price from 10% to 25%, well, everybody, you know, starts freaking out about what happened. And that's a good thing because then we can go and police it. And I think that's a bit of that dynamic happening. But over time society will adapt. I mean, the candidates now know it's like, well, if I'm going to do something on my campaign and I get caught, it's pretty much going to ruin my campaign. So, I'm not going to do it.
