Prediction market Kalshi is implementing mandatory employer disclosure for traders in high-risk markets to combat rising insider trading. The move, effective immediately, follows several high-profile incidents, including cases involving a Google employee and former Rep. George Santos. Kalshi will also use a risk-scoring system and has referred over 20 cases to law enforcement this year amid a surge in trading volume to $24 billion.
Midterm election insider trading risks
- ▪In April 2026, the U.S. Senate banned its members and staff from betting on prediction markets
- ▪In March 2026, the White House warned staff against using non-public government information on prediction market platforms
- ▪Experts warn that policing insider trading during the U.S. midterm elections will be difficult, with at least 6,590 legislative seats in play
Prediction market trading volume surge
- ▪Kalshi's monthly trading volume was $16.81 billion in May 2026, while Polymarket's was $7.08 billion
- ▪Combined monthly global trading volumes on Kalshi and Polymarket surged nearly fivefold from September to April, reaching about $24 billion
Granular election contract proliferation
- ▪Research indicates election-related betting markets are becoming more granular, focusing on variables like voter turnout, which increases insider trading risks
- ▪In 2024, a major election year, Polymarket listed 1,293 election-related markets with $7.26 billion in trading volume
Kalshi enforcement actions
- ▪In the first quarter of 2026, Kalshi conducted over 150 investigations and made over 20 referrals to law enforcement
- ▪Kalshi will use a new risk-scoring system to identify markets with heightened risk of manipulation or insider trading
- ▪The new measures are effective immediately and follow recommendations from Kalshi's independent Surveillance Audit Committee, established in February 2026
- ▪Prediction market Kalshi will require traders in certain high-risk markets to disclose their employer to combat insider trading
- ▪In April 2026, Kalshi suspended three congressional candidates for betting on their own election races
- ▪Kalshi reported former U.S. Rep. George Santos to federal authorities over suspicious trades on his State of the Union attendance
Polymarket compliance framework
- ▪A U.S. Army soldier was charged with using classified information to make bets on Polymarket regarding Venezuelan President Nicolás Maduro
- ▪In May 2026, a Google employee was charged with insider trading for using company data to place bets on rival platform Polymarket
CFTC staffing shortages
- ▪The Commodity Futures Trading Commission's (CFTC) enforcement staff is at a 20-year low with 105 positions
- ▪A former CFTC enforcement director, Aitan Goelman, said the agency's resources are "not even close" to meeting its needs
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