Key facts
- Kalshi will require users to disclose employment information for trades on certain sensitive contracts.
- The new measures aim to prevent insider trading and address concerns raised by lawmakers.
- Kalshi has opened over 150 investigations into potential insider trading this year.
- Verification of employment data will occur if an investigation is triggered.
- Kalshi and Polymarket are facing scrutiny from lawmakers regarding insider trading risks.
- A U.S. Army soldier was charged with using classified information to profit on Polymarket, and a Google employee was charged with using confidential company information on the same platform.
Prediction market Kalshi is introducing new security measures, including mandatory employment disclosures for users trading on certain sensitive contracts, in an effort to combat alleged insider trading. The company stated these measures will help identify and screen out individuals who may possess material, non-public information before they can place trades.
These changes come amid increasing scrutiny from lawmakers who claim that prediction markets incentivize insider trading. Kalshi and its competitor Polymarket are reportedly facing pressure to implement stricter rules to avoid potential government regulation. Kalshi has reportedly opened over 150 investigations into suspected insider trading this year, with verification of employment data occurring if an investigation is triggered.
The move follows high-profile cases, including the charging of a U.S. Army special forces soldier, Gannon Ken Van Dyke, for allegedly using classified information to profit over $400,000 on Polymarket. Separately, a Google employee was charged with using confidential company information to make over $1.2 million on the same platform. These cases represent the first criminal charges for insider trading on a prediction market.
Kalshi, a U.S.-based exchange regulated by the CFTC, operates within a formal legal framework. Polymarket, in contrast, emerged offshore and operates on blockchain infrastructure, allowing for greater anonymity. Both platforms are reportedly introducing new products like leveraged perpetual futures, which could increase market risks.