Kalshi imposes stark new rule for certain traders
Kalshi recently confirmed that it will require users to disclose their employers before trading in contracts flagged as high-risk.
The new requirement is part of a broader set of market integrity updates the company announced on June 9, including a risk-scoring framework and expanded whistleblower tools.
This new framework is the result of a string of high-profile insider trading cases that rattled the industry in the first half of 2026, prompting both platforms and regulators to act.
For ordinary traders, the move signals that the era of low-friction, largely anonymous betting on current events may be winding down faster than expected.
Kalshi's employer screening targets high-risk contracts
The requirement does not apply to every market on the platform and applies only to contracts flagged by Kalshi's new internal risk-scoring system.
Markets tied to corporate performance, national security developments, and major geopolitical events, such as the war in Iran, are the most likely to require employer disclosure, according to Kalshi's June 9 blog post.
Users subject to screening must submit their employment details via an online form before placing any trades in the flagged contracts.
The platform said it will not independently verify the employer data it collects unless a formal investigation is opened into suspicious activity.
However, traders identified as presumptive insiders could be blocked from specific contracts based entirely on where they work, the company confirmed.
To illustrate the policy, Kalshi noted that a Google employee seeking to trade on a Google-related prediction market would face automatic restrictions.
That example reflects what happened on rival platform Polymarket, where a Google engineer was recently charged with insider trading by federal prosecutors.
A wave of insider trading scandals prompted Kalshi's crackdown
The employer-screening rule follows several enforcement actions that have rattled prediction market platforms throughout the first half of 2026.
Federal prosecutors charged Google software engineer Michele Spagnuolo in late May with using confidential company data to earn $1.2 million trading on Polymarket.
Spagnuolo allegedly used confidential data from Google's 2025 Year in Search list to bet on at least 23 Year in Search List contracts with near-perfect accuracy, the CFTC alleged.
Those trades generated roughly $1.2 million in profits, the Commodity Futures Trading Commission alleged in a civil complaint filed in New York.
More Wall Street:
In April, an Army Special Forces soldier was charged with using classified intelligence about the military operation to capture Venezuelan leader Nicolás Maduro.
The soldier allegedly earned more than $400,000 by betting on the timing and outcome of that operation through Polymarket, federal prosecutors stated.
Kalshi has faced its own enforcement challenges, including an ongoing investigation into former Congressman George Santos over suspicious prediction-market trades.
Federal regulators are examining whether Santos placed bets related to his own attendance at the 2026 State of the Union address, NPR first reported.
Kalshi says it has been policing itself with increasing force
Beyond the employer-screening requirement, Kalshi unveiled a broader package of measures, which it described as market integrity updates, in Kalshi's June 9 blog post.
The platform said the changes followed the first quarterly report of its Independent Surveillance Audit Committee, established in February 2026.
The platform introduced a risk-scoring framework that evaluates new markets for insider trading potential and national security sensitivity before contracts are listed.
By implementing these new integrity measures, we continue to lead the industry on the issue of market integrity amongst federally regulated prediction markets
Kalshi also expanded its whistleblower tools, allowing users to report suspicious trading activity directly to a surveillance team that continuously monitors the platform.
Earlier in 2026, the platform fined and suspended three political candidates who placed bets on their own elections, which Kalshi labeled political insider trading.
Kalshi confirmed that it opened more than 150 investigations in the first quarter of 2026 and referred more than 20 cases to the CFTC and the Department of Justice, along with five disciplinary actions.
Regulators and lawmakers zero in on the prediction market industry
The CFTC has taken the lead in overseeing prediction markets on the theory that event-contract exchanges resemble the commodity exchanges it already regulates.
Congressional pressure is building alongside federal enforcement, with House Oversight Committee Chairman James Comer requesting documents from both Kalshi and Polymarket on May 22 covering identity verification, geographic restrictions, and suspicious trading detection.
Representative Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would prohibit federal officials from trading on nonpublic information.
JPMorgan Chase warned its roughly 320,000 employees this spring to exercise caution when using prediction market platforms, stopping just short of an outright ban.
Several states, including Rhode Island, Nevada, Washington, and Massachusetts, have filed civil cases against prediction market exchanges, while Arizona has brought criminal charges, alleging that event contracts violate state gambling statutes and evade local regulatory oversight, the Boston Globe reported.
Kalshi and Polymarket together control roughly 85% to 95% of total prediction market volume, making enforcement changes at either platform significant for the broader industry.
For prediction market users, the overlapping enforcement push from federal prosecutors, state attorneys general, Wall Street compliance teams, and Congress signals a rapidly shifting landscape.
Related: Cautious bond traders race to reset Fed rate bets
The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
This story was originally published June 13, 2026 at 5:03 AM.