Kalshi's CEO, Tarek Mansour, has confirmed that his employees asked social media influencers to promote memes about the FBI's raid on the home of his arch-rival, Polymarket CEO Shayne Coplan. This revelation has sparked controversy in the events-betting market industry, where both companies operate.

The FBI raided Coplan's home last month, and it appears that Kalshi attempted to capitalize on its rival's misfortunes by promoting memes about the incident. Mansour revealed this information on a podcast interview, stating that his team "got pretty heated" and asked long-standing affiliates to post memes, but did not pay them.

However, a report by Pirates Wires, a media outlet founded by Mike Solana, claimed that Kalshi employees were paying influencers to post content suggesting that Polymarket and its CEO were engaging in illegal activities. Notably, Pirates Wires acknowledged its own conflicts of interest, as Solana is a chief marketing officer for Founders Fund, one of Polymarket's key investors, and Polymarket is an advertiser for Pirates Wires.

The podcast segment discussing Kalshi's response to the raid and the rivalry with Polymarket was deleted shortly after it initially aired. However, TechCrunch obtained and listened to the deleted portion, which revealed Mansour's accusations against Polymarket of engaging in similar social media tactics against Kalshi.

Mansour stated that both companies have been involved in these tactics, citing instances where Polymarket allegedly posted content suggesting that Kalshi was raided by the FBI, which did not occur. TechCrunch was unable to confirm these allegations, as neither Polymarket nor Kalshi responded to requests for comment.

Despite not firing the employees involved, Mansour acknowledged that they "understand that it was a mistake, and they shouldn't do this again." He also expressed his desire to move beyond the social media wars, stating, "I don't think there's a point going tit for tat."

The controversy surrounding the FBI raid on Polymarket's CEO is reportedly linked to political motivations surrounding wagers on the US presidential elections. According to Bloomberg, the Department of Justice is investigating Polymarket for allegedly allowing U.S. users to engage in restricted trades. This is despite a 2022 settlement with the Commodity and Exchange Commissions, which bars Polymarket from allowing U.S. traders to place bets on its platform.

In contrast, Kalshi has been legally permitted to accept trades from U.S. residents since 2021. The company also won a lawsuit in September, allowing it to accept bets on election outcomes. Kalshi, backed by Sequoia and Y Combinator, is currently raising a funding round of at least $50 million, as reported by TechCrunch last month.

The incident highlights the intense rivalry between Kalshi and Polymarket in the events-betting market industry. As both companies continue to navigate the complexities of their business, it remains to be seen how this controversy will impact their operations and reputation in the market.