Anabelle Colaco
17 May 2026, 02:51 GMT+10
NEW YORK CITY, New York: Kalshi and Polymarket are reporting a sharp increase in suspicious trading as prediction markets attract more users and trading volumes soar.
The surge is testing the platforms' compliance systems and drawing greater attention from regulators and lawmakers concerned about insider trading and market manipulation.
According to sources familiar with the matter, Kalshi has investigated and flagged more than 400 suspicious trades since the start of the year, more than double the number it reviewed during all of last year. Some of those trades were referred to the Commodity Futures Trading Commission, or CFTC.
Polymarket has also seen a significant rise in flagged trades, according to another source. "In the world of corporate insider trading, it is often relatively easy to identify the parties with access to material nonpublic information who might trade in violation of the law," said Joseph Grundfest, professor at Stanford Law School and a former commissioner of the Securities and Exchange Commission. "But equivalent data is often very difficult or impossible to collect in connection with some prediction markets."
Prediction markets allow users to buy and sell contracts tied to the outcomes of events such as elections, economic policy decisions, and sporting contests.
Trading has surged as investors increasingly use the platforms to gauge likely outcomes before making investment decisions.
Kalshi said earlier this month that annualized trading volume has more than tripled over the past six months to US$178 billion.
According to Dune Analytics, Polymarket's monthly notional volume reached about $10.3 billion in April, up from $3.8 billion a year earlier.
"Economically, the nature of these markets is such that they let you trade not on the market reaction to news, but on the actual news - so there's less risk," said Vincent Gregoire, professor at HEC Montreal.
Both companies have tightened their rules to prohibit trading based on confidential information.
In April, Kalshi banned three U.S. congressional candidates for what it called political insider trading. Polymarket has also removed some war-related contracts following public scrutiny.
"If someone has insider information, they might be way more inclined to act on it on prediction markets than on equity markets," said Charles Martineau, professor at the University of Toronto's business school.
Get a daily dose of Central Asia Times news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Central Asia Times.
More InformationNEW YORK CITY, New York: Kalshi and Polymarket are reporting a sharp increase in suspicious trading as prediction markets attract more...
DUBLIN, Ireland: A detective garda accused of helping an organized crime gang, taking bribes, and possessing over 100 rounds of ammunition...
ABOARD AIR FORCE ONE/DUBAI: U.S. President Donald Trump said he was losing patience with Iran and claimed that China's President Xi...
SAO PAULO, Brazil: Senator Flávio Bolsonaro denied any wrongdoing in his reported request for millions from jailed banker Daniel Vorcaro,...
BEIJING, China: President Donald Trump left Beijing on May 15 after two days of meetings with Chinese President Xi Jinping that produced...
KYIV, Ukraine: The country's anti-corruption court ordered the arrest of Andriy Yermak, a close associate of President Volodymyr Zelenskyy...
WASHINGTON, D.C: Boeing is set to receive an order for 200 aircraft from China, U.S. President Donald Trump said during his visit to...
TAIPEI, Taiwan: Taiwan's ruling Democratic Progressive Party (DPP) nominated lawmaker Puma Shen, who China has sanctioned for supporting...
BEIJING, China: President Donald Trump and an entourage that included Nvidia's Jensen Huang and Elon Musk landed in Beijing to a lavish...
BEIJING, China: The families of two Americans who have been in prison in China for over 10 years are asking U.S. President Donald Trump...
HONG KONG: China's passenger car exports surged in April as automakers accelerated their expansion overseas to offset weakening demand...
Jaipur (Rajasthan) [India], May 16 (ANI): Rajasthan Chief Minister Bhajanlal Sharma on Saturday boarded an electric vehicle (EV) bus...
