Polymarket has implemented new rules prohibiting insider trading on its prediction market platform, while competitor Kalshi plans to bar athletes and politicians from participating in trades, according to reports from Bloomberg and Axios. The moves represent the first coordinated regulatory response from major prediction market operators following heightened scrutiny from U.S. regulators.
Polymarket's insider trading restrictions will require users to disclose material non-public information and prohibit trading based on such information, mirroring compliance frameworks used in traditional securities markets. The platform did not specify enforcement mechanisms or penalties for violations. Kalshi's participant restrictions target categories deemed to pose elevated conflict-of-interest risks, effectively narrowing the addressable user base for political and sports betting products.
The policy shifts underscore growing pressure on decentralized prediction markets to adopt institutional-grade compliance controls. Both platforms face potential regulatory action if restrictions prove insufficient, particularly as the U.S. Commodity Futures Trading Commission has signaled intent to oversee prediction market operators more closely. Implementation timelines and grandfather provisions for existing users remain unclear.