Kalshi will collect employer data from users betting on company-specific or national security events after Q1 saw 150+ investigations and 20+ law enforcement referrals.
Kalshi said Tuesday it will start collecting employment information from users who try to place bets on markets the firm deems higher risk for insider trading. The new rule applies to "markets with heightened insider or manipulation risk," Kalshi said. One example the company gave: a contract on whether OpenAI or Anthropic will go public first.
The platform, registered as a designated contract market with the Commodity Futures Trading Commission, is adding a compliance layer that no prediction market operator has tried at scale. The move follows a string of insider-trading incidents on Kalshi and rival Polymarket.
Kalshi said it opened more than 150 internal investigations in the first quarter and made over 20 referrals to law enforcement for potentially illegal trading activity.
Former Congressman George Santos is under investigation for alleged insider trading on Kalshi, according to NPR. Earlier this year, Kalshi said it had discovered that candidates for Congress from Minnesota, Texas, and Virginia were betting on their own races.
The problem is not limited to Kalshi. Last month, a Google employee was charged with insider trading after using company information to place bets on Polymarket. And earlier this year, a US special forces soldier was accused of making successful bets on the removal operation of Venezuelan President Nicolás Maduro. He has pleaded not guilty.
All four cases share a pattern: people with non-public information used prediction contracts to profit before the news broke. Kalshi's new screening is designed to catch those trades before they fill.
Kalshi said it developed a new risk-scoring method to flag markets that appear more susceptible to manipulation or insider trading. The system targets two categories: contracts tied to specific companies and those involving national security matters.
The risk score determines whether a market triggers the employment-data requirement. If it does, users must submit detailed work information before placing a trade. Kalshi said the data lets the platform screen for potential insiders before the trade executes.
The approach mirrors how stock exchanges monitor trading by corporate executives. Public companies require insiders to file Form 4 trades with the SEC. Prediction markets have no equivalent system. Kalshi's move is an attempt to build one.
Practical rule: the screening is strongest for narrow-event contracts where employment overlap is easy to verify. A bet on "AAPL will close above $250" has a clear insider pool. A bet on a broad election outcome has a much larger set of potential insiders, making the screening less precise.
The table shows the gap. Stock exchanges have a decades-old framework. Prediction markets are building theirs from scratch. Kalshi's employment-data requirement is the first operational attempt to close the gap.
Prediction markets are a growing source of signals for equity traders. Election contracts, earnings-event contracts, and company-specific bets can shift ahead of traditional polls or news. If Kalshi's screening reduces the number of informed trades, the market's information advantage could narrow.
The trade-off is reliability. Trades placed without insider risk may better reflect genuine public sentiment. A cleaner signal helps traders who use prediction-market odds as a cross-check against equity prices.
Kalshi's compliance data is not public. The firm did not say whether it will disclose how many trades get blocked or how many users are flagged. That opacity makes it hard for outside observers to judge the system's effectiveness.
The next catalyst to track is the CFTC's stance. The Commodity Exchange Act prohibits fraud in contract markets but does not explicitly ban insider trading in event contracts. The CFTC has not issued a rule on the subject. If it does, every prediction platform would need a compliance system similar to Kalshi's.
For now, the practical take: if you trade on Kalshi and your employer overlaps with a contract's subject, expect a job-detail prompt before you can place a bet. The same requirement may eventually spread to Polymarket and other platforms as regulators take a closer look.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.