Kalshi adds insider-trading safeguards as prediction markets face scrutiny

Prediction market operator Kalshi has introduced a series of new market integrity measures aimed at preventing insider trading and market manipulation, as the sector faces growing scrutiny from lawmakers and regulators

The measures, which take effect immediately, include employment disclosure requirements for traders participating in sensitive markets, a whistleblower portal and tools that allow users to flag suspicious activity directly from market pages.

Kalshi said the changes were based on recommendations from an independent Surveillance Audit Committee established to oversee the company’s market integrity and enforcement program.

Under the new framework, Kalshi will assign risk scores to markets based on factors including corporate performance metrics, product launches, outcome concentration, national security implications and the potential for manipulation.

For markets deemed to carry heightened insider-trading or manipulation risks, the company will require employment information from traders before they can participate.

“For markets with heightened insider or manipulation risk, we now collect employment information before traders can participate,” Kalshi said.

The company said the verification process is designed to identify individuals with access to material non-public information and prevent them from trading on affected markets.

Kalshi representatives said the measures will allow the company to “identify presumptive insiders, people who have material, non-public information about a market’s outcome, and screen them out before a trade is ever placed.”

The company also launched a whistleblower portal and expanded reporting tools, with tips reviewed by a surveillance team that monitors trading activity around the clock.

“By implementing these new integrity measures, we continue to lead the industry on the issue of market integrity amongst federally regulated prediction markets,” Robert DeNault, Kalshi’s head of enforcement, said.

Prediction markets, which allow users to trade contracts linked to the outcome of future events, have attracted significant investor interest in recent years. However, platforms including Kalshi and rival Polymarket have come under increased scrutiny over concerns that market participants could profit from insider information.

Reuters reported last week that U.S. federal regulators are investigating whether former U.S. congressman George Santos engaged in potential insider trading on Kalshi.

The industry’s compliance practices have also come under renewed focus following cases involving alleged insider trading on Polymarket, including those involving U.S. Army soldier Gannon Ken Van Dyke and Google employee Michele Spagnuolo.