Kalshi and Polymarket have both rolled out new anti-insider trading measures, as prediction markets face heavier scrutiny from regulators and lawmakers in Washington. The updates were announced on March 23 and focus on restricting who can trade, how suspicious activity is flagged, and what conduct is explicitly banned.
The timing matters because insider trading has become one of the most sensitive issues facing the sector. The CFTC has now issued both an enforcement advisory and a market oversight advisory for prediction markets this year, while Congress has introduced multiple bills targeting military, government, sports, and other event contracts.
Kalshi adds pre-trade blocks for politicians and sports participants
Kalshi said it is introducing technological guardrails that aim to preemptively block political candidates from trading on their own campaigns and to stop people involved in college and professional sports from trading in markets tied to their leagues. The company said it had already prohibited that activity, but enforcement had previously depended more heavily on investigations after trades were placed.
The company is also adding a whistleblower tool that lets users report suspicious trades directly from market pages. Kalshi linked the changes to recent federal guidance and said it wants these integrity controls to become standard across the industry.
Polymarket rewrites its rules across both platforms
Polymarket’s update is centered on rule clarity. The company said its revised framework now explicitly prohibits three categories of insider trading: using stolen confidential information, trading on illegal tips, and trading by people who can influence an event’s outcome. It also launched new market integrity pages to explain the rules and give users a channel to report suspicious activity.
The company said its broader enforcement framework also covers spoofing, wash trading, fictitious transactions, self-dealing, front-running, and other manipulative practices. It is backing that approach with layered surveillance, including blockchain visibility on its DeFi platform and oversight arrangements for its U.S. exchange. Earlier this month, it also announced a sports integrity platform being developed with Palantir and TWG AI.
The bigger issue is whether the changes satisfy Washington
Both companies are responding to pressure that is no longer theoretical. The CFTC’s February advisory referenced recent enforcement cases involving misuse of nonpublic information on Kalshi, including a candidate trading on his own race, while the agency’s March market advisory told exchanges to take proactive steps as prediction markets expand.
That means the immediate question is not whether Kalshi and Polymarket recognize the insider trading risk. It is whether these new controls are enough to convince regulators and lawmakers that prediction markets can police themselves before Washington imposes tighter rules of its own.
