Kalshi's $22B valuation at risk after report ties it to 2024 Polymarket raid

A New York Times report revealed Kalshi's lawyers met with federal prosecutors before the FBI raided Polymarket CEO Shayne Coplan's apartment, escalating a feud between the two prediction market giants.

Kalshi, the $22 billion regulated prediction market operator, is under scrutiny after a report detailed how its attorneys met with federal prosecutors in Manhattan before the FBI raided the apartment of Polymarket founder and CEO Shayne Coplan in November 2024, according to the New York Times.

"The only issue Tarek has with Shayne is his reckless approach to an industry that Kalshi has spent years getting regulated," Elisabeth Diana, a Kalshi spokeswoman, told the Times, adding that the company learned about the FBI search through media coverage.

The raid occurred Nov. 13, 2024, when FBI agents used a battering ram to enter Coplan's Lower Manhattan apartment as part of an investigation into whether Polymarket illegally allowed U.S. users to place bets on its platform. Kalshi's outside counsel had detailed to prosecutors how Polymarket's platform operated, including how American users could still access its markets despite restrictions. Coplan publicly called the search political retaliation by the Biden administration.

The revelation marks the latest escalation in a yearslong rivalry between two companies that have built the same product on opposite legal foundations — Kalshi spent years and millions securing a CFTC license before launching, while Polymarket launched offshore and grew faster without U.S. approval. Combined trading volume across both platforms surpassed $150 billion in the first half of 2026, up roughly 1,200% from a year earlier, according to The Block.

A Feud Rooted in Competing Business Models

The bad blood between Mansour, a former Citadel trader who co-founded Kalshi in 2018 with MIT classmate Luana Lopes Lara, and Coplan, who launched Polymarket in 2020, stretches back years. During one early meeting, Coplan tried to establish common ground by noting both were raised by single mothers — a comment that made Mansour uncomfortable, the Times reported.

The competitive dynamic hardened as both companies pursued opposite regulatory strategies. In January 2022, the CFTC fined Polymarket $1.4 million for operating an unregistered platform, and the company agreed to stop serving U.S. customers. Kalshi had been raising concerns about Polymarket with the agency since its own licensing discussions, according to the Times.

The ban was supposed to clear the U.S. field for Kalshi, but the CFTC also blocked bets on elections, forcing Kalshi to spend 2023 and 2024 suing the agency instead of selling. Polymarket, banned from the U.S. but accessible through VPNs, became the story of the 2024 election. Kalshi won its court case shortly before the vote. Coplan got the FBI at his door the week after.

The Cost of Compliance vs. Speed

Kalshi's regulatory-first approach has since translated into a valuation advantage. The company is worth $22 billion at its last completed round, roughly $7 billion above Polymarket, and processed more than $33 billion in trades in the most recent full month, about twice Polymarket's total, according to The Block. Kalshi is now in talks for a round at roughly $40 billion, which would nearly double its last valuation.

Polymarket has fought back by buying its way onshore. After the Southern District dropped its investigation, Coplan acquired QCX, a CFTC-licensed exchange, for $112 million, and launched a smaller compliant U.S. app while keeping the main offshore platform running. Intercontinental Exchange, the owner of the New York Stock Exchange, committed up to $2 billion to Polymarket — reportedly after Mansour and a Kalshi investor made a late push to talk ICE out of it.

Both companies now face mounting legal challenges from multiple state attorneys general who argue their sports prediction products amount to illegal gambling. Kalshi has already lost ground in at least one state. Polymarket remains under investigation by the CFTC.

The feud has also produced collateral damage. A Kalshi employee directed former NFL star Antonio Brown to post on X accusing Coplan of being "guilty" shortly after the raid, using a racial slur. Brown later walked back the post. Polymarket launched an internal investigation for what it believed to be product leaks to Kalshi, amassing a dossier of suspicious incidents.

This article is for informational purposes only and does not constitute investment advice.