Prediction market platform Kalshi announced a series of upgrades to combat market manipulation on June 9, including risk scoring, employment verification requirements, and expanded whistleblower reporting tools.
The company said the changes are based on recommendations from its independent Surveillance Audit Committee and took effect immediately.
Under the new framework, Kalshi will assign risk scores to markets deemed more susceptible to insider trading or manipulation. The scoring system evaluates factors including corporate event risk, outcome concentration, market importance, regulatory concerns, non-traditional insider risks, and national security considerations.
Markets with elevated risk scores may face additional scrutiny, and some could be rejected from listing altogether.
Kalshi also said it will begin collecting employment information from traders participating in higher-risk markets. The company said the measure is designed to identify individuals who may possess material non-public information about an event then prevent them from trading before transactions occur.
In addition, Kalshi has expanded its whistleblower program by adding reporting tools to every market on the platform. Users can now directly report suspected insider trading, market manipulation, spoofing, or other potentially abusive trading activity to the company’s surveillance team.
According to Kalshi, its enforcement unit opened more than 150 investigations during the first quarter. The company said it blocked more than 100 potential insider trades through screening tools, made more than 20 referrals to law enforcement, and issued five disciplinary actions.
Kalshi said it does not list markets involving war, assassination, or violence but has added a national security review component to assess whether certain markets could create unintended security concerns.
The Surveillance Audit Committee, which Kalshi describes as independent, reviewed company policies, monitoring systems, algorithms, and enforcement practices before issuing its recommendations. The committee will continue producing quarterly reports evaluating the exchange’s efforts to detect and prevent insider trading, market manipulation, and other forms of abusive trading activity.
In March, Arizona Attorney General Kris Mayes filed a 20-count indictment against Kalshi, accusing it of operating an illegal gambling and election wagering business in the state.
The charges alleged Kalshi accepted wagers from Arizona residents on college and professional sports, player performance props, the Super Bowl, political legislation, and future elections, including Arizona statewide races.
Kalshi disputes the allegations, arguing it is a federally regulated futures exchange overseen by the Commodity Futures Trading Commission, not a sportsbook. CEO Tarek Mansour called the charges an overreach, while Arizona officials contend the company is violating state gambling and election laws.
A federal officials with the Commodity Futures Trading Commission (CFTC) said that prediction markets like Kalshi are not regulated at the state level and in April, filed a lawsuit to challenge Arizona’s efforts to apply state criminal and gambling laws against the platform.
“Arizona’s decision to weaponize preempted state criminal law against companies that comply with a comprehensive federal regime sets a dangerous precedent,” Chairman Michael S. Selig said in a statement. “We are asking the court to send a clear message that intimidation is not an acceptable tactic to circumvent federal law.”
The court sided with the CFTC in May, barring Arizona from pursuing criminal or civil enforcement actions against trades listed on CFTC-regulated markets.
