Kalshi Requires Employer Disclosures to Curb Insider Trading on Prediction Markets
Kalshi, a federally regulated prediction market exchange, announced Tuesday it will require some users to disclose their employers as part of a crackdown on insider trading and market manipulation. The new policy applies to markets deemed at higher risk of insider activity, with traders potentially screened before placing trades. The changes follow recommendations from an independent Surveillance Audit Committee and take effect immediately. Kalshi stated the process aims to identify individuals with access to material nonpublic information. This move comes amid increasing scrutiny of prediction markets, highlighted by a recent study showing only 3% of Polymarket traders accounted for most price moves from 2023 to 2025. Notable cases include a U.S. Army Green Beret arrested for $400,000 bets on Polymarket regarding a raid he participated in, and a Google engineer arrested for alleged insider trading on the platform. Kalshi reported blocking over 100 potential insider trades in Q1, opening over 150 investigations, referring more than 20 cases to law enforcement, and issuing five disciplinary actions. The exchange also introduced a risk-scoring system evaluating markets based on insider-trading risk, market importance, regulatory concerns, and national-security implications, with high-risk markets facing tighter controls or rejection. New whistleblower tools allow users to flag suspicious activity directly from market pages. Industry experts see Kalshi's measures as crucial for building surveillance infrastructure to match prediction markets' rapid growth.
Key facts
- Kalshi will require employer disclosures for users trading in high-risk prediction markets.
- The policy follows recommendations from an independent Surveillance Audit Committee.
- Kalshi blocked over 100 potential insider trades and opened 150+ investigations in Q1.
- A new risk-scoring system ranks markets based on insider risk, regulatory concerns, and national security.
- Whistleblower tools now allow users to report suspicious activity directly from market pages.