How your funds are handled, from deposit to withdrawal.
Summary
Kalshi is partnered with LedgerX LLC, a clearinghouse regulated by the Commodity Futures Trading Commission (CFTC), to ensure secure trades for every member.
The connection between a member's bank account and Kalshi is facilitated securely through Plaid.
What is a clearinghouse?
A clearinghouse serves as an intermediary between two parties that are engaging in a financial transaction or exchange of assets. The primary purpose of a clearinghouse is to ensure that both parties fulfill their obligations to the other, providing stability and peace of mind over the course of the exchange.
A clearinghouse does this by:
Validating the funds of both parties before the transaction.
Recording the transaction details in a ledger.
Securely holding the funds of the involved parties until the transaction is complete.
Delivering the funds/assets to the appropriate parties.
The use of a clearinghouse is crucial in upholding the stability of a financial market.
Example: An investor named David wishes to sell 700 shares of Apple to another investor named Anna. The participating clearinghouse will ensure that David receives the appropriate amount for his shares in Apple and that Anna will receive the 700 shares from David. Without a clearinghouse, David would be unable to confirm that Anna possesses the necessary funds to purchase the stock. Anna would also be unsure if the shares would be transferred to her following payment to David. This uncertainty could put the transaction in jeopardy.
The clearinghouse that is utilized by Kalshi, LedgerX LLC, is one of the major federally regulated clearinghouses authorized to clear and settle funds in the United States.
Connecting Kalshi to your bank account
Kalshi utilizes Plaid to securely connect a member's bank account with their Kalshi account. A member's bank account is linked with their Kalshi account to enable automated clearing house (ACH) deposits and withdrawals. ACH allows secure transfers between the member's bank account and Kalshi account without the need for paper checks, wire transfers, or credit card networks.
Plaid is used to facilitate this connection for safety purposes. Before a member's sensitive banking information is sent to Kalshi, it is encrypted end-to-end so it is not compromised or viewed by unwanted parties during transit. Plaid never shares a user's login information with Kalshi at any time and never sells user data to third parties.