Kalshi has rolled out stricter compliance rules requiring employment disclosure for traders participating in sensitive prediction markets, aiming to curb insider trading and market manipulation. The U.S.-based platform also introduced a risk-scoring system, expanded screening procedures, and new whistleblower tools for reporting suspicious activity.
New safeguards target insider risks
The changes came immediately after a review by Kalshi’s Surveillance Audit Committee, established in February to oversee compliance and trading conduct. Under the updated framework, each proposed market is assigned a risk score based on factors including regulatory alignment, insider exposure, relevance, and national security concerns.
Kalshi’s enforcement and legal counsel, DeNault, said the review process now includes explicit checks for national security risks before approving new listings. Markets flagged as higher risk will require traders to disclose their employers, allowing the platform to screen participants before permitting trades.
Enforcement activity rises
Internal data shows Kalshi has already stepped up enforcement. In the first quarter of 2026, the platform made more than 20 referrals to law enforcement, conducted over 150 investigations, and blocked more than 100 suspected insider trades. The company said these measures are meant to improve transparency and deter misuse of non-public information.
The new disclosure requirements also respond to increasing pressure from the White House and Congressional investigations focused on whether government officials could exploit privileged information in prediction markets. Individuals with access to sensitive data through their jobs may now be restricted from trading in specific high-risk contracts.
Broader crackdown across prediction markets
Regulatory scrutiny is intensifying across the prediction market sector, where Kalshi and Polymarket dominate trading volume. Several recent criminal cases have highlighted the risks tied to insider information.
Authorities charged a U.S. Army soldier with using classified intelligence to generate more than $400,000 in profits tied to Venezuelan military developments. In a separate case, a software engineer allegedly earned about $1.2 million by trading on confidential internal data. Federal prosecutors and the Commodity Futures Trading Commission have also pursued parallel civil and criminal actions, signaling that event-based contracts fall under existing anti-fraud regulations.
Officials have emphasized that these platforms are not exempt from enforcement and that trades based on misappropriated information may be prosecuted as commodities or wire fraud.
Trading volumes grow despite tighter rules
Even as oversight increases, Kalshi continues to report strong growth. The platform recorded up to $17.9 billion in trading volume in May, marking another monthly high and extending its growth streak. Transaction activity also surged, widening the gap with competitor Polymarket, which saw declining volumes over the same period.
Kalshi said the enhanced compliance framework is designed not only to address regulatory expectations but also to differentiate it from offshore, less regulated competitors. The company added that the updated safeguards, including disclosure requirements and monitoring tools, will apply to all future market listings.
For deeper insight into prediction markets’ future and risk controls, explore our guide on prediction markets in 2026.
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