Kalshi to Require Workplace Disclosure to Curb Insider Trading in U.S. Prediction Markets

Kalshi, a U.S. prediction market platform, plans to require some prediction market participants to disclose their workplace in order to prevent insider trading and market manipulation.

Reuters Yonhap News

On June 9 (local time), The Wall Street Journal (WSJ) reported that Kalshi will soon require users attempting to place bets in certain markets involving important non-public information to submit an online form disclosing their workplace.

The disclosure requirement will apply to sensitive betting markets related to non-public material information, including corporate earnings, national security, and the Iran war. However, unless suspicious trading is detected, Kalshi will not verify the submitted workplace information separately. If suspicious trades are identified, the company will initiate an investigation and request employment verification.

This measure by Kalshi follows recommendations from its audit committee. In a summary of its findings, the committee recommended that Kalshi collect users' workplace information. The report noted that under Kalshi's current data collection system, "identifying potential insider relationships generally required manual review using public information after transactions had already occurred." The committee also evaluated that collecting employment information "could enhance market surveillance analysis, early-stage investigation review, and deterrence."

In addition, Kalshi plans to strengthen its internal whistleblower function to report suspicious trades. The audit committee report also revealed for the first time that in the first quarter of this year, Kalshi reported more than 20 suspicious transactions to the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice. According to sources familiar with the matter, among the accounts reported to federal authorities this year were those associated with former New York Congressman George Santos and military spouses.

Concerns about insider trading are growing across the prediction market industry as a whole. In April, a U.S. Army soldier was charged with using classified information regarding the arrest of former Venezuelan President Nicolas Maduro to trade on Polymarket. Last month, a Google employee was charged with earning $1.2 million on Polymarket by using internal information related to Google’s annual Search Trends report.

As a result, lawmakers, regulators, and prosecutors have raised concerns and increased pressure on prediction market operators such as Kalshi and Polymarket to strengthen their response to suspicious trades.

This content was produced with the assistance of AI translation services.