Kalshi taps StarCompliance to spy on its own employees before regulators do 🕵️

Prediction market operator Kalshi has partnered with compliance software provider StarCompliance to roll out a monitoring platform aimed at helping financial firms track employee activity across prediction markets, according to a Wednesday announcement. The system is designed to flag trades based on transaction volume, trading patterns, market categories and work-hour activity, while giving firms a centralized way to manage investigations and audit records tied to prediction market exposure across onchain and offchain environments. StarCompliance said the product is intended to address risks around material non-public information, as employees at financial firms may be able to use sensitive business or market information to trade event contracts. The new capability extends StarCompliance's existing employee compliance platform, which already tracks traditional securities and digital asset activity, to include prediction market trading through Kalshi.

The launch comes days after a federal judge set a December trial date for US Army Master Sgt. Gannon Ken Van Dyke, who prosecutors allege used non-public information about a military operation targeting Venezuelan President Nicolás Maduro to earn more than $400,000 on prediction market platform Polymarket. Van Dyke has pleaded not guilty to the charges. At least 11 states have taken legal or regulatory action against platforms such as Kalshi and Polymarket over whether event contracts should be regulated under state gambling laws or as federally regulated derivatives overseen by the Commodity Futures Trading Commission. Nevada became the first state to temporarily block Kalshi's operations earlier this year, while Arizona accused the company of operating an illegal gambling business by offering event contracts to state residents.

Kalshi sued Minnesota at the end of May after the state enacted what CFTC Chair Michael Selig described as the country's first outright ban on prediction markets. The CFTC later joined Kalshi in a separate legal challenge against Rhode Island officials over the regulation of event contracts, and last week the agency sued New Mexico officials after the state accused Kalshi of offering unlicensed sports betting, marking the eighth state targeted by the regulator as it seeks to block state-level restrictions on prediction market platforms. Last month, Representative James Comer asked CEOs of Kalshi and rival Polymarket to provide information as part of a congressional inquiry into the sector.