Kalshi has probed and flagged more than 400 suspicious prediction market trades this year, while Polymarket has also seen a rise in flagged activity, sources familiar with the matter said.
One source said Kalshi flagged some trades to the Commodity Futures Trading Commission, the US derivatives regulator, though the agency did not immediately comment.
The scrutiny has grown as prediction-market volumes jumped and lawmakers pressed platforms to curb insider trading. The CFTC issued a February advisory after enforcement cases involving the misuse of nonpublic information and fraud on KalshiEX event contracts.
Kalshi said earlier in May that annualised trading volume had more than tripled over six months to $178 billion. Polymarket’s monthly notional volume across its offshore exchange and US platform reached about $10.3 billion in April, according to Dune Analytics cited by Bloomberg.
Stanford Law School professor Joseph Grundfest said prediction markets can make it harder to identify people with access to material nonpublic information than in corporate insider-trading cases.
Kalshi and Polymarket recently updated rules to bar bets using confidential information or illegal tips, while Kalshi banned three US congressional candidates in April for “political insider trading.”
CFTC Chair Michael Selig has said the agency will aggressively prosecute insider trading. The CFTC also began work in March on prediction-market regulations as federal and state officials dispute jurisdiction over event contracts.
