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Kalshi adds employment verification to curb prediction market insider trading

Engadget •
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Kalshi is implementing new verification requirements for certain bets, asking users to disclose their employment information to prevent insider trading. The prediction market platform will roll out these rules in coming weeks, targeting bets on topics like company performance and national security where insiders might have unfair advantages.

Prediction markets have struggled with insider trading violations. High-profile cases involved a MrBeast employee and political candidates, including one who tried to spin the controversy into a campaign platform. Former Congressman George Santos also faced allegations related to trading activity on these platforms.

When suspicious activity triggers review, the company typically confirms employment details provided by users. This approach represents a middle ground between maintaining open markets and preventing abuse, though effectiveness remains uncertain given users' willingness to circumvent existing rules.

Regulatory pressure continues mounting. Several states have attempted to sue prediction markets and classify them as gambling, while the federal government has claimed exclusive jurisdiction under the CFTC. International restrictions have gained more traction, with Spain implementing outright bans as domestic oversight develops.