Kalshi Introduces New Integrity Controls To Detect Insider Trading

Prediction markets platform Kalshi has introduced a new set of integrity measures to improve oversight as interest in event-based trading increases.

The company announced the changes on 9 June following recommendations from its independent Surveillance Audit Committee. According to Head of Enforcement Robert DeNault, every market will undergo a formal review process before launch.

Under the new framework, each market will receive a risk score based on six criteria. These include the potential influence of corporate actions, how outcomes are affected by a small number of individuals, regulatory considerations, and the possibility that participants possess publicly unavailable information.

National Security And Insider Information Become Key Focus Areas

Kalshi will add national security considerations to its market review process for contracts linked to geopolitical developments or military action. For higher risk markets, traders will be required to disclose their employer information before participation is approved.

The company believes this will help identify individuals whose professional positions may provide access to sensitive information. Where potential conflicts of interest are identified, Kalshi may impose restrictions on participation.

These changes arrive as prediction markets attract increasing attention from regulators, investors and major sporting organisations. Platforms such as Kalshi allow users to trade on the election outcomes, economic releases, sporting events and geopolitical developments.

DeNault said the latest measures are intended to improve confidence in the platform as the sector evolves.

Recent Insider Trading Cases Prompt Tighter Controls

The announcement follows several enforcement actions that brought additional scrutiny to the prediction market sector earlier this year. In February, Kalshi disclosed that it had referred two insider trading cases to regulators. 

One involved a former California gubernatorial candidate accused of trading on the outcome of his own election campaign. The second centred on a YouTube editor who allegedly used confidential information to place trades. Both individuals were suspended and fined by the platform.

More recently, Kalshi also sanctioned several political candidates for participating in markets tied to their election races. Questions around market integrity have extended beyond Kalshi. Rival platform Polymarket has also attracted attention after a US Army soldier was accused of profiting from trades linked to sensitive military information.

Company Expands Enforcement And Reporting Capabilities

Kalshi reported over 150 investigations conducted during the period, while over 100 potentially problematic trades were blocked before execution. More than 20 cases were referred to law enforcement agencies and five disciplinary actions were issued.

To strengthen user reporting, Kalshi has integrated whistleblower tools into market pages, allowing traders to flag suspicious activity to its surveillance team.

The company said its independent Surveillance Audit Committee will continue publishing quarterly reviews as prediction markets become a larger part of the global financial and wagering ecosystem.

Kalshi has put measures in place to limit the chances of insider trading on its platform. The new framework attributes risk scores to markets based on six criteria. There have been two cases of insider trading reported by Kalshi to regulators. These new controls are integral to ensuring transparency in the prediction markets industry.