Issues over insider buying and selling on prediction markets have intensified after a collection of high-profile bets on geopolitical occasions, prompting contemporary questions over whether or not it’s even possible to curb such practices within the rising business sector.
Stopping insider buying and selling is realistically potential solely on prediction markets making use of Know Your Customer (KYC) measures, in accordance with Austin Weiler, a analysis analyst on the blockchain intelligence agency Messari.
“For KYC’d platforms, the best mechanism is to limit entry upfront for customers to particular markets,” Weiler informed Cointelegraph, including that state actors may very well be restricted from political or geopolitical markets.
“This doesn’t absolutely eradicate abuse, since insiders can nonetheless share data with third events, but it surely provides an vital impediment and raises enforcement requirements,” he famous.
The issue with non-KYC prediction markets
For non-KYC, or absolutely onchain prediction markets, enforcement is extraordinarily difficult and, in some instances, “practically not possible,” Weiler stated.
When wallets usually are not linked to real-world identities, there isn’t any dependable option to determine merchants or decide whether or not they have entry to materials private data (MPNI), he stated.
“Prediction markets can try to observe uncommon buying and selling conduct, cap commerce sizes, or gradual buying and selling throughout delicate geopolitical intervals. Nevertheless, these measures are simply bypassed,” Weiler stated, including:
“Bans focusing on authorities officers are solely realistically enforceable in KYC-based methods. Whereas all onchain exercise is clear, transparency alone doesn’t remedy the attribution drawback. With out identification verification, this can be very troublesome to hyperlink an onchain pockets to a selected official, state actor, or insider with confidence.”
Kalshi, Polymarket, Opinion: Who requires KYC and the way?
On the time of writing, KYC necessities range broadly throughout established prediction platforms reminiscent of Kalshi and Polymarket, whereas decentralized alternate options don’t seem to require identification checks, or can not technically assist them.
Kalshi enforces KYC necessities as a part of its regulated mannequin beneath the authority of the US Commodity Futures Buying and selling Fee. On its sign-up web page, Kalshi states that it requires fundamental private data from customers and should request additional verification utilizing an identification doc.
Polymarket applies KYC to its US-based customers, whereas non-US variations of the platform function with out obligatory identification checks, with entry reportedly accessible by way of VPN, according to social media experiences. The platform doesn’t publicly affirm this in its person guide.
Opinion, a decentralized prediction market backed by YZi Labs, an organization linked to the previous Binance CEO Changpeng Zhao, provides no public data on KYC necessities.
Cointelegraph approached Kalshi, Polymarket and Opinion for remark concerning KYC necessities however had not obtained any response on the time of publication.
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The information comes amid intense scrutiny of main prediction market platforms following high-profile bets tied to geopolitical events in Venezuela, together with experiences of an nameless dealer turning $30,000 into greater than $400,000 simply hours earlier than US forces captured former Venezuelan President Nicolás Maduro.
Some US lawmakers, together with Consultant Ritchie Torres, have backed laws together with the Public Integrity in Monetary Prediction Markets Act of 2026, aimed toward barring government officials from trading on prediction markets after they maintain materials nonpublic data.
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