Kalshi has announced a broad expansion of its surveillance and enforcement framework as scrutiny around insider trading in prediction markets continues to grow. The federally regulated platform said the changes are designed to strengthen market integrity, protect users, and reinforce compliance standards that align with its oversight by the Commodity Futures Trading Commission.

Founded in 2018, Kalshi spent its early years securing regulatory approval before launching its first product. As a CFTC-regulated exchange, the company already enforces restrictions on market manipulation and insider trading, applies Know-Your-Customer and Anti-Money Laundering checks to all users, and reports every trade to regulators on a daily basis. The latest measures add new layers of independent review, external expertise, and expanded enforcement leadership.

New advisory committee and expert oversight

A central element of the overhaul is the creation of an Independent Surveillance Advisory Committee. The committee includes Lisa Pinheiro, managing principal at Analysis Group, and Daniel Taylor, director of the Wharton Forensic Analytics Lab. Both have experience analyzing market manipulation, insider trading, and fraud-related activity.

The committee will provide quarterly analysis to Kalshi’s outside legal counsel and publish statistics related to flagged trades, investigations opened and closed, and disciplinary actions initiated by the exchange. Taylor will also collaborate directly with Kalshi’s surveillance partners to assess complex trading patterns.

“Market integrity is one of the pillars of Kalshi’s growth strategy. I am pleased to advise Kalshi on further processes and safeguards to detect and deter insider trading and market manipulation,” Taylor said.

Kalshi has also engaged Brian Nelson, a former Under Secretary of the Treasury for Terrorism and Financial Intelligence and a partner at Cooley, to advise on market integrity, surveillance, and financial compliance. His role adds government-level financial intelligence experience to the company’s internal controls.

Technology partnerships and enforcement leadership

Alongside the advisory committee, Kalshi announced a partnership with Solidus Labs, a trade surveillance technology firm that primarily works with crypto exchanges. Kalshi will use Solidus’ systems to supplement its internal monitoring tools across more than 4,000 markets.

“We are proud to support Kalshi on its mission to reinvent financial markets with event-based trading,” said Asaf Meir, founder and CEO of Solidus Labs. “At Solidus, we believe that a platform built to trade on the future deserves a trade surveillance partner that isn’t stuck in the past. By deploying Solidus’ agentic trade surveillance and compliance hub, Kalshi is demonstrating once again its highest commitment to consumer investor protection and market integrity.”

Kalshi also appointed company lawyer Robert DeNault as head of enforcement. DeNault joined the company at the end of 2025 after working in White & Case’s global white collar crime practice, where he advised on securities fraud, regulatory matters, and internal investigations. In his new role, he will coordinate with the advisory committee, surveillance partners, and Kalshi’s compliance department.

“Kalshi was the first to regulate prediction markets in America,” DeNault said. “We’re now bringing on some of the industry’s leading surveillance experts to build and guide the future of prediction market compliance.”

Insider trading concerns and regulatory context

The expanded surveillance efforts come amid heightened attention on insider trading risks within prediction markets. Recent discussion intensified after trades tied to the potential removal of Venezuelan President Nicolas Maduro appeared on Polymarket, an offshore platform that is not regulated by the CFTC and is unavailable to U.S. users.

On the podcast Pablo Torre Finds Out, journalist James Surowiecki said prediction markets can create harmful incentives tied to confidential information. “We’re essentially creating an incentive for people to leak insider information or to use insider information to make money,” Surowiecki said.

Unlike stock markets, insider trading in prediction markets is not automatically illegal unless it involves misappropriated information or manipulation. Kalshi, however, bans all trading based on material non-public information under its own rules. Co-founder Tarek Mansour has said this approach mirrors traditional financial markets.

“Some say insider information can make prediction markets more accurate,” Mansour wrote on X. “But the same argument can be made for stock markets, where insider trading is banned. Insider trading erodes trust. When people believe a market is unfair, they stop trading. Liquidity dries up, volume collapses, and the market dies. Also, allowing it could incentivize bad actors to leak information they shouldn’t. So Kalshi bans insider trading.”

Mansour said the company conducted more than 200 investigations in the past year, froze accounts linked to suspicious activity, and referred several cases to law enforcement. Kalshi’s updated enforcement framework focuses on detecting unusual patterns through real-time monitoring, investigating flagged trades, and pursuing actions that can include warnings, fines, and referrals to regulators or the Department of Justice.

Kalshi has also added Responsible Trading and Market Integrity hubs to its website to explain consumer protections and regulatory standards. The company said it supports legislation that would ban government officials from trading on private government information, a position that aligns with concerns raised by state gaming regulators about consumer protection in prediction markets.