Prediction Market Integrity
Kalshi Introduces Risk-Scoring and Disclosure Rules to Combat Insider Trading
Key Points
Kalshi’s risk-scoring framework evaluates each market across six specific dimensions: “corporate event risk, outcome concentration, market importance, regulatory compatibility, non-traditional insider risk, and national security risk.” Markets scoring above a threshold trigger the employer-disclosure requirement.
Kalshi says it will not routinely cross-check trader employment information; it will do so only if circumstances flag suspicion. The company also said a trader’s workplace could disqualify them from participating in certain contracts—for example, a “Google employee seeking to trade on a Google-related market.”
For illustrating insider-information risk, Kalshi pointed to a hypothetical market on whether “OpenAI or Anthropic will go public first,” saying that participants may have non-public information relevant to the outcome.
Coverage linked the new compliance push to prior allegations involving geopolitical events: accounts tied to “military spouses” reportedly bet correctly on the ousting of Venezuelan President Nicolás Maduro days before U.S. officials seized him in January, and “at least one” of those accounts was “referred to federal investigators over suspicions” of nonpublic-information trading.
Separately from the compliance changes, Kalshi co-founder and COO Luana Lopes Lara told Web Summit Rio audiences she “stick[s] by” her view that “these outcome-wagering platforms will be bigger than the stock market,” adding a time window of “Maybe a longer time, maybe 5 to 10 years.”
Kalshi announced sweeping new market-integrity rules on June 9, requiring traders to disclose their employers before betting on high-risk contracts, according to Reuters. The rules use a six-part risk-scoring system to flag sensitive markets — and in Q1 2026 alone, the platform opened more than 150 investigations, made over 20 referrals to law enforcement, and blocked 100-plus potential insider trades.
The crackdown follows one of prediction markets' biggest scandals. In January, accounts linked to military spouses correctly bet on the U.S. seizure of Venezuelan President Nicolás Maduro days before it happened, per Benzinga. By April, federal authorities had charged a U.S. soldier with using classified data to trade on the operation.
A Soldier Charged and Congress Demands Answers
The Maduro trades set off a chain reaction. On April 24, a U.S. soldier was charged with using classified national security information to profit on Kalshi, according to Political Bytes. A month later, House Oversight Committee Chairman James Comer launched a formal investigation into both Kalshi and rival platform Polymarket over suspiciously timed bets before military operations.
Comer warned that internal platform records are the "only means by which bad actors can be identified," questioning whether existing safeguards were anywhere near enough. The scrutiny put Kalshi under pressure to act fast — and publicly — before regulators forced their hand.
Kalshi's Six-Part Risk Score Targets Insider Advantage
Kalshi's new framework scores every market across six dimensions: corporate event risk, outcome concentration, market importance, regulatory compatibility, non-traditional insider risk, and national security risk. Markets that clear the threshold trigger a mandatory employer disclosure, per The Defiant. As one example, a Google employee would be blocked from trading on a Google-related market.
Kalshi says it will not routinely verify employment data — only when suspicious activity is flagged. The company pointed to a hypothetical market on whether OpenAI or Anthropic will go public first as a clear example of non-traditional insider risk, where employees could hold material non-public information. Kalshi Head of Enforcement Robert DeNault said the new measures make Kalshi the leader "on the issue of market integrity amongst federally regulated prediction markets," according to Al Jazeera.
CFTC Drops 267-Page Proposal the Same Week
The timing was not a coincidence. On June 10 — one day after Kalshi's announcement — the CFTC published a 267-page proposed rulemaking document to set a federal framework for "event contracts," according to Legal Sports Report. CFTC Chairman Michael Selig said the goal is to protect market integrity "without standing in the way of responsible innovation."
The agency signaled it may allow sports-related trading while blocking contracts tied to assassination, war, or topics it deems contrary to the public interest. Regulators also flagged "micro-betting" — where a single trader can sway an outcome — as a manipulation risk requiring case-by-case review. Some legal analysts told American Banker that Kalshi's risk-scoring system appears designed to "pre-comply" with whatever the CFTC ultimately mandates.
COO Bets on Surpassing Stocks — Critics Point to the Gap
Even as the scandals mounted, Kalshi COO Luana Lopes Lara took the stage at Web Summit Rio and doubled down on the platform's ambitions. "These outcome-wagering platforms will be bigger than the stock market," she said, adding "maybe 5 to 10 years," according to PCMag. She argued prediction markets are more "intuitive" and "human" than traditional equities.
Critics say the numbers tell a different story. Equity markets trade roughly $456 billion every single day. Prediction markets hit just $21 billion for the entire month of January 2026, per data from TRM Labs and FINRA cited by PCMag. That is a gap of more than 600-to-one — leaving Lara's prediction a long way from reality, whatever the timeline.
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