Kalshi Faces FTC Referral Over AI-Altered Influencer Ads
Marketing agencies and platforms using AI to alter creator content now face increased scrutiny from federal regulators.
Updated on Sept. 25, 2026 in Advertising
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Kalshi has been referred to the FTC by the National Advertising Division following reports that the firm used AI to alter the race of creators in repurposed marketing videos. The platform has since ceased running AI-generated advertisements that depict human subjects.
Why it matters
The referral highlights rising regulatory tension regarding AI-generated influencer content, marking a significant compliance risk for businesses that outsource ad production. Companies must now navigate stricter oversight on how they manipulate or repurpose original creator media.
The CFTC is currently reviewing 1 million trades on the Kalshi platform, with specific trade patterns accounting for a 48% to 58% volume share. Market makers linked to these activities earned $98,000 in profits on ether perpetual futures trades sized at $5,500.
The players
Kalshi
A prediction market platform that facilitates trading on event contracts and utilizes liquidity incentive programs.
Federal Trade Commission
A federal agency tasked with protecting consumers and ensuring competition by enforcing truth-in-advertising laws.
National Advertising Division
A self-regulatory body that reviews advertising claims and refers potential violations to federal authorities.
Commodity Futures Trading Commission
A federal agency that regulates derivatives markets and oversees the integrity of trading platforms.
Elliot Choy
A digital content creator known for producing apartment-tour and lifestyle videos.
The details
Kalshi reportedly hired an ad agency that utilized AI tools to change the race of content creators in existing videos, such as an apartment-tour clip originally posted by Elliot Choy in September 2025. Following a similar incident reported by creator Pushpek Sidhu in June 2026, the company stopped using AI-generated ads that feature people. Beyond marketing, the platform is adjusting operations by requiring some users to disclose their employer before participating in specific markets.
Timeline
September 2025: Elliot Choy posted his original apartment-tour video.
June 2026: Pushpek Sidhu reported unauthorized use of his content by Kalshi.
September 23, 2026: Choy discovered the unauthorized AI-modified advertisement.
Market Landscape
This development follows a pattern of increasing federal scrutiny of influencer marketing transparency under the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising. It reflects broader efforts by regulators to rein in AI usage that obscures the origin or nature of paid promotional content.
Businesses utilizing third-party agencies for influencer content should immediately audit their contracts to ensure full disclosure of AI-editing practices. Operators must treat AI-modified creator assets with the same disclosure rigor as traditional testimonials to mitigate potential FTC scrutiny.
The takeaway
The use of AI to alter creator content introduces significant reputational and regulatory risks that far outweigh potential marketing gains. Review your agency agreements to ensure that all generated media complies with federal disclosure standards regarding synthetic content.
Further reading
For more on industry standards and federal oversight, see our Advertising section.
Source note: This article includes information reported by Startup Fortune.
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