Kalshi Introduces New Measures to Combat Insider Trading
Kalshi, a prediction market platform, is taking significant steps to enhance security and prevent insider trading by requiring participants in certain markets to disclose their employment details. This move follows recommendations from an advisory committee focused on tightening measures against potential market manipulation.
Users who wish to place bets on markets linked to sensitive or nonpublic information will now need to complete an online form that reveals their place of employment. These changes are expected to be implemented in the coming weeks. Markets related to company performance, national security, and events like the conflict in Iran are likely to be among those requiring this additional disclosure.
According to a Kalshi spokesperson, the company typically won’t verify the employment information provided by users unless there is suspicious activity. If such activity is detected, Kalshi will investigate further and may request proof of employment.
The growing popularity of platforms like Kalshi and Polymarket has increased pressure on these services to address concerns about insider trading. Lawmakers, regulators, and prosecutors have raised alarms about the risks associated with these platforms.
Kalshi’s decision to implement these changes comes after a report from its audit committee, which suggested that collecting employment information would improve market surveillance and help deter illicit activities. The report highlighted that identifying potential insider relationships usually required manual reviews using publicly available data after trading had already occurred. By gathering employment details, Kalshi aims to enhance its ability to conduct early-stage investigations and improve overall market analysis.
The audit committee consists of notable figures, including Brian Nelson, a former Treasury undersecretary for terrorism and financial intelligence; Daniel Taylor, director of the Wharton School’s forensic analytics lab; and Lisa Pinheiro, a managing principal at Analysis Group.
In addition to these new measures, Kalshi is also enhancing its whistleblower features. The audit committee's report revealed that Kalshi has referred over 20 cases to the Commodity Futures Trading Commission (CFTC) and the Justice Department during the first quarter of 2026. Among those referred were former New York Congressman George Santos and accounts linked to military spouses.
Notably, some accounts belonging to military spouses made accurate bets about the ousting of former Venezuelan President Nicolás Maduro just before his arrest by U.S. officials in January. At least one of these accounts was referred to federal investigators, as there was suspicion that someone used nonpublic information to make the bet.
Kalshi, which operates under the regulation of the CFTC, enforces federal know-your-customer (KYC) rules. These require users to provide personal information such as their address, partial Social Security number, phone number, date of birth, and identity documentation. Users must be at least 18 years old.
In May, Kalshi introduced new identity verification measures, including facial recognition, to prevent minors from accessing their parents’ accounts. The company emphasizes its use of KYC as a key differentiator from its competitor, Polymarket, which does not require users to submit proof of identity.
Kalshi has also supported the launch of Americans for Fair Markets, an advocacy group promoting federally regulated, onshore exchanges over offshore platforms that lack KYC requirements and recourse options.
Recent high-profile cases involving insider trading on platforms like Polymarket have prompted regulatory scrutiny. In April, a U.S. soldier was charged with using classified information about Maduro's arrest to trade on Polymarket. Last month, a Google employee was charged with using insider information about the company's annual search trends report to make $1.2 million on Polymarket.
In both cases, prosecutors relied on information from other sources to identify the individuals involved. Polymarket moved its operations offshore after a 2022 settlement with the CFTC, placing it outside the scope of U.S. regulations.
Polymarket has emphasized its collaboration with law enforcement in these cases. When the indictment against the Google employee was unsealed, the company's chief legal officer, Neal Kumar, tweeted, “Say it with me now—it’s not anonymous.”
Polymarket has a data partnership with Dow Jones, the publisher of The Wall Street Journal.
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