Prediction Market Kalshi Cracks Down on Insider Trading With New Identity Checks

Kalshi introduced new compliance measures on Tuesday designed to target prediction markets it considers more exposed to insider trading and manipulation risks.

The platform said it will require selected users to disclose their employers as part of a broader effort to improve oversight and reduce potential abuse on its markets.

As a federally regulated exchange, Kalshi noted that the new rules will apply only to contracts flagged as higher risk, where traders may be subject to additional screening before being approved to participate.

The company said the policy takes effect immediately and follows recommendations from an independent Surveillance Audit Committee that reviewed its monitoring systems, enforcement processes, and internal controls.

“For markets with elevated insider or manipulation risk, we now collect employment information prior to participation,” Kalshi said, adding that the goal is to identify traders who may have access to material non-public information.

The move comes amid growing scrutiny of prediction markets from both regulators and academic researchers. Recent studies of Polymarket activity between 2023 and 2025 found that a small group of traders drove a disproportionate share of price action, while several real-world cases have involved alleged insider betting tied to sensitive events.

Kalshi said it blocked more than 100 suspected insider trades in the first quarter, conducted over 150 investigations, referred more than 20 cases to law enforcement, and issued several disciplinary actions, although it did not provide detailed case information and the figures could not be independently verified.

Alongside employer disclosure rules, the platform is also introducing a new risk-scoring system that evaluates markets based on insider risk, regulatory sensitivity, and national-security considerations, with the ability to restrict or reject listings deemed too risky.

It has also added whistleblower reporting tools that allow users to flag suspicious activity directly within individual markets.

Overall, the changes reflect a broader push toward stronger surveillance and compliance infrastructure as prediction markets scale, with industry observers saying these systems are becoming essential for institutional credibility.