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Prediction market giant Kalshi has released new features aimed at combating market manipulation, its most visible response yet to a growing backlash over event contracts tied to military actions.
In a statement on its website, Kalshi announced an expansion of internal policies and technological tools designed to enhance market integrity.
“Today, we’re announcing an expansion of our internal capabilities and policies against insider trading and market manipulation,” the company said. “We’re launching new technological guardrails that preemptively block politicians, athletes, and other relevant people from trading in certain politics and sports markets.”
The company noted that these efforts have been in development for months and “proactively address” Commodity Futures Trading Commission guidance and proposed congressional legislation.
Curbing insider trading on prediction markets
Public outcry intensified following the 2024-2025 ouster of Venezuelan President Nicolás Maduro and the airstrikes in Iran that killed Ayatollah Ali Khamenei. Critics pointed to a series of trades placed immediately before those events that resulted in nearly $2 million in profits.
The windfall led to concerns that individuals with nonpublic information were using the platform to monetize geopolitical instability. To address this, Kalshi is implementing preemptive screening to block political candidates from trading on their own campaigns or relevant legislative outcomes.
While Kalshi maintains such trades have always been prohibited by its terms of service, the new updates automate the process, using internal platform checks to block transactions before they are finalized.
Expanding protections to sports and leagues
Additionally, Kalshi has onboarded a new policy directed at college and professional sports. The system blocks individuals associated with specific teams or organizations from trading on leagues in which they are involved. To facilitate this, the platform compiled comprehensive lists of athletes and personnel to enforce the bans.
Kalshi’s announcement is the latest sign that the prediction market industry is responding to intense pressure to rein in bad actors. It likely represents an opening salvo in a wave of regulatory and self-imposed changes expected across the sector this year.
