Regulatory Upgrade Impacts Prediction Markets, Kalshi and Polymarket Strengthen Insider Trading Control Mechanisms

Gate News Report, March 24 — As regulatory pressure in the U.S. Congress continues to rise, prediction market platforms Kalshi and Polymarket are simultaneously strengthening controls against insider trading and market manipulation, pushing the industry toward greater compliance.

Kalshi announced the introduction of a new screening mechanism that bans political candidates from participating in trades related to their own elections. The platform has also expanded this to sports markets, restricting insiders such as athletes, coaches, and referees from betting on related events. Additionally, the platform has launched a reporting feature and partnered with monitoring agencies to enhance the detection of abnormal trading activities. Kalshi’s legal advisor Bobby DeNault stated that these measures are aimed at proactively responding to regulators’ demands for market transparency.

Meanwhile, Polymarket updated its rule framework to specify three types of violations: trading based on confidential information, insider trading, and trading by participants with a direct impact on outcomes. The platform has also tightened restrictions on false quotes, wash trading, and front-running activities. Neal Kumar, Polymarket’s legal head, noted that the new rules will clarify the boundaries of participant behavior and strengthen compliance infrastructure.

On the regulatory front, the U.S. Commodity Futures Trading Commission (CFTC) recently issued guidance warning about the risks of prediction contracts involving sports events and sensitive information. Senators Adam Schiff and John Curtis have simultaneously proposed new legislation to restrict the development of sports and similar betting prediction markets, emphasizing state-level regulatory authority.

Under the tightening policy environment, prediction markets are facing structural adjustment pressures. Data shows that Kalshi and Polymarket still hold major market shares, with trading volumes continuing to grow. Moving forward, as regulatory frameworks are gradually refined, platform compliance capabilities are likely to become a key competitive factor.