Prediction markets need to be safe spaces to trade, and Kalshi is committed to leading the industry on market integrity. Today, we are announcing new market integrity measures based on the independent Surveillance Audit Committee’s first ever report – effective immediately.
What we’re rolling out:
Risk scoring: We have developed a specific risk score assigned to markets with heightened insider trading or manipulation risk.
Employment Verification: For markets with certain scores, we will collect employment and put in measures to screen potential insiders.
Enhanced whistleblower features: New features allow users to directly report abusive trading activity on every market, and a dedicated intake system for whistleblower reports.
"By implementing these new integrity measures, we continue to lead the industry on the issue of market integrity amongst federally regulated prediction markets.”
- Kalshi Head of Enforcement Robert DeNault
Kalshi enforcement Q1 stats:
150+ investigations (confidential until cases are closed)
100+ potential insider trades blocked by new screening tools
20+ referrals to law enforcement
5 Kalshi disciplinary actions
Risk Scoring
Here is how our new risk scoring framework will work in practice. When a new market is proposed for listing, it is processed through a system that considers its:
Corporate KPI or events risk: Markets related to areas covered by traditional MNPI – e.g. corporate KPIs, product releases, etc.
Outcome concentration risk: Risk lower for broad, decentralised processes or physical measurements, and higher where markets turn on a decision by a single individual or opaque group with broad discretion.
Market importance: Analysis ranges from niche social or hobbyist markets to critical-scale markets with national or geopolitical reach. Less important markets that carry high insider or manipulation risk scores may be rejected from listing.
Regulatory risk: Evaluates whether the market is compatible with applicable regulations.
Non-traditional insider risk: Occurs when people have material non-public information about a market, but no preexisting legal duty to protect that information or refrain from trading on it.
National security risk: Assesses the degree of kinetic activity (war, military action, physical violence, etc.) that could reasonably be connected to an event that may resolve the market.
While Kalshi does not list markets on war, assassination, or violence, we recognize that even standard markets on leadership or foreign policy might present incidental national security concerns. By running an assessment on the national security risk a market might present before we list it, we can better prevent dangerous events from having a negative effect on our markets – or vice versa.
Employment Verification
For markets with heightened insider or manipulation risk, we now collect employment information before traders can participate. This lets us identify presumptive insiders – people who have material, non-public information about a market’s outcome – and screen them out before a trade is ever placed.
Whistleblower Enhancements
All Kalshi markets feature public orderbooks. Anyone can see trading activity in real time, making our traders a natural first line of defense against abusive behavior, like insider trading, market manipulation, spoofing, or other potential illicit financial activity.
We’ve now made it easy to act on that. Every market on Kalshi has reporting tools for users to submit whistleblower tips. These tips go straight to our surveillance team, which monitors the feed 24/7. Additionally, we have built internal alerting controls to receive and handle whistleblower tips we receive from our traders. If you see suspicious activity on the platform, report it.
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About the committee:
The independent Surveillance Audit Committee was appointed to oversee our market integrity and enforcement program. Their job: stress-test our monitoring and enforcement of abusive trading behavior (insider trading, market manipulation, spoofing, etc.) and tell us where there’s room to improve. For this first report, the Committee interviewed our staff, examined our policies, reviewed our algorithms, and collaborated with our external surveillance partners. They began a deep dive on thresholds we use to detect insider trading, market manipulation, and other illicit trading activity, and reviewed the risks presented by markets listed across the exchange, specifically for national security risk. The Committee will continue to deliver quarterly reports, and we’ll keep acting on them. We’re always working to make Kalshi a safer place to trade.
