Kalshi mandates employment disclosure to curb insider trading in high-risk markets
The firm requires users trading in markets deemed at heightened risk of manipulation to reveal their employment details, aiming to screen out individuals with non-public knowledge.
Prediction market platform Kalshi has introduced new market integrity measures requiring users trading in markets deemed at heightened risk of manipulation to disclose their employment details. The New York-based firm stated the initiative aims to screen out individuals with access to non-public knowledge, responding directly to findings from its Independent Surveillance Audit Committee, which was established in February.
Robert DeNault, Kalshi’s head of enforcement, said the measures are designed to lead the industry on market integrity among federally regulated prediction markets. Alongside the employment disclosure requirement, the company introduced a scoring system to determine market risk levels and a dedicated 24/7 channel for receiving whistleblower reports.
The announcement follows a series of high-profile insider trading allegations affecting both Kalshi and its cryptocurrency-based rival, Polymarket. In April, the United States Department of Justice charged a US special forces soldier with betting on the capture of former Venezuelan President Nicolas Maduro on Polymarket before the operation occurred. Subsequently, prosecutors charged a Google software engineer with exploiting company information to make trades on the same platform.
Kalshi has also taken internal enforcement action, sanctioning three US political candidates with fines and account suspensions in April for betting on their own campaigns. The firm also referred former Republican Congressman George Santos to authorities for wagering on his attendance at President Donald Trump’s State of the Union Address in February.
Data released by Kalshi on Tuesday revealed the scale of its enforcement efforts in the first quarter of the year. The platform launched more than 150 investigations, blocked more than 100 potential cases of insider trading, and made more than 20 referrals to law enforcement.
The regulatory tightening comes as Kalshi and Polymarket have rapidly grown into multibillion-dollar businesses since launching in 2021 and 2020, respectively. According to a Pew Research Center analysis of data from The Block, the combined monthly trading volume on these platforms reached $24bn in April, a significant increase from less than $5bn in September of the previous year.
