Kalshi is implementing a new policy to publicly disclose enforcement actions against users suspected of trading violations, including insider trading. Robert DeNault, head of enforcement at Kalshi, stated that the prediction market has been working through a backlog of potential violations and plans to publish these actions in the coming weeks.
This initiative aims to address skepticism surrounding market integrity, fueled by large payouts and legislative calls for stricter oversight. DeNault explained that Kalshi is professionalizing its disciplinary framework to align with established financial markets, distinguishing between legitimate information asymmetry and illegal activity. The platform has generated significant trading volume, particularly around major events like the Super Bowl.
Kalshi's enforcement efforts focus on policing "source agency" trading, where individuals affiliated with the entity responsible for a contract's resolution are barred from trading. Violations, even without profit, will result in public disciplinary notices. This includes policing the misuse of material, nonpublic information, such as in cases involving event performers and their confidentiality agreements.
Kalshi CEO Tarek Mansour emphasized that insider trading erodes market trust and that the platform's surveillance system, Poirot, has conducted over 200 investigations, with several cases referred to law enforcement.