Prediction markets have stepped up their efforts to combat insider crypto betting

Polymarket and Kalshi updated their rules after the U.S. Senate proposed restrictions on certain forecasts

Crypto prediction markets are tightening controls on insider trading: Polymarket has expanded its list of prohibited activities, while Kalshi has introduced new tools for identifying insiders. At the same time, Polymarket has launched a program to attract new users.

The Kalshi platform announced that it is implementing new technological measures that proactively block politicians, athletes, and other individuals associated with specific political and sports markets from participating in trading. The service has also made it easier for users to report violations.

Polymarket announced that it has updated its restrictions policy, introducing clearer rules regarding insider trading. Three main categories of prohibited actions were identified: trading based on stolen confidential information, trading based on insider information, and trading by individuals who can directly influence the outcome of an event.

In addition to insider trading, the platform’s global and U.S. divisions have banned “all forms of fraud and market manipulation, including spoofing, fictitious trades and trading using illiquid assets, as well as self-trading, front-running, misuse of information, attempts at manipulation, and disruptive actions that interfere with the normal functioning of markets.”

These updates come as the U.S. Senate has introduced a bill titled “Prohibiting Prediction Markets Related to Sports Competitions or Gambling.” The bill covers a wide range of products, including contracts related to professional and collegiate sports.

Previously, a bill was introduced aimed at banning bets on prediction markets related to death, war, and murder. This occurred following the U.S. and Israeli strike on Iran, which resulted in the killing of the republic’s Supreme Leader, Ali Khamenei.

Kalshi and Polymarket are the largest prediction markets for cryptocurrency betting. According to The Block, monthly trading volume on Kalshi in February was approximately $10.44 billion, while on the global Polymarket platform it was $7.94 billion. For the first part of March, the figures were $9.61 billion and $8.14 billion, respectively. On Polymarket US (a service for the U.S. market), trading volume was $263 million in February and has already reached $393 million this month.

Users of prediction markets place bets on the outcome of events by purchasing “yes” or “no” tokens. The token’s market price reflects the collective assessment of probability: for example, $0.20 indicates a 20% chance of the event occurring. Winning tokens pay out $1 each, while losing tokens are worth zero. They can be traded within the platforms themselves, just like on an exchange, until the outcome is determined.

On March 24, Polymarket also updated its referral program. The platform offers to return up to 30% of the commissions from new customers referred by users. Existing traders with a trading volume of at least $10,000 are eligible to participate in the program.

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