Kalshi says it's introducing new security measures to combat insider trading
Prediction markets like Kalshi and Polymarket are under scrutiny from lawmakers.
The prediction market Kalshi will roll out a new suite of security measures as part of its push to quell concerns over alleged insider trading, the firm announced Tuesday.
The measures are expected to include employment verification requirements for users before they can wager on certain events tied to corporate performance or national security.
Kalshi and its top competitor, Polymarket, are facing scrutiny from lawmakers who claim that prediction markets incentivize insider trading.
ABC News has reported on how the top firms in this booming industry are racing to quiet those critics and avoid strict government regulation by imposing their own set of rules.
Kalshi representatives said their new measures will allow the company to "identify presumptive insiders -- people who have material, non-public information about a market's outcome -- and screen them out before a trade is ever placed."
In what could be the first U.S. prosecution of insider trading on a prediction market to go to trial, a federal judge on Monday set a tentative date for the trial of U.S. Army special forces soldier Gannon Ken Van Dyke, who is charged with using classified information about the capture of Venezuelan President Nicolas Maduro to make more than $400,000 on the prediction market Polymarket. He has pleaded not guilty.
Five weeks after Van Dyke's arrest, prosecutors in New York last month charged a Google employee with using confidential company information to make more than $1.2 million on the Polymarket platform. Michele Spagnuolo, an Italian citizen, did not enter a plea when he appeared before a federal magistrate judge, and was released on a $2.25 million bond.
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