Polymarket, Kalshi Make Moves to Counter Insider Trading as Scrutiny Grows
Prediction market platforms Polymarket and Kalshi have introduced new measures to combat insider trading amid increased regulatory and political scrutiny. Polymarket updated its rules to clarify and prohibit insider trading activities, such as trading on privileged information or illegal tips, across both its DeFi and CFTC-regulated U.S. platforms. The company utilizes multi-layered monitoring and real-time surveillance, including collaboration with Palantir, to detect suspicious trading, particularly in sports-related markets. Kalshi introduced a policy barring individuals affiliated with college or professional sports—like coaches or athletes—from trading on related events, and is implementing preemptive screening to block trades by insiders, including politicians. Both platforms have added whistleblower features, allowing users to report suspected insider trading. Recent high-profile cases, including a significant win related to Venezuelan politics and suspensions for trading on inside information, have heightened scrutiny of these markets. Lawmakers are considering additional regulations, including proposals to restrict federal employees and certain market categories.
