StarCompliance and Kalshi have launched a new compliance solution that allows financial institutions to monitor employee activity in prediction markets, as firms face rising concerns over insider trading risks tied to event-based contracts.
The announcement, released on June 17 via PR Newswire, outlines what the companies describe as the first enterprise-grade global compliance system designed specifically for prediction markets. The product integrates Kalshi trading data into StarCompliance’s existing surveillance infrastructure, which many financial firms already use to oversee employee activity in equities and derivatives.
How the monitoring system works
The system allows employers to require staff to disclose their prediction market accounts and link them directly to internal compliance tools. Once connected, transactions can be monitored in real time, with alerts triggered based on firm-defined risk parameters such as trading patterns, transaction volume, or activity during working hours.
According to details cited by Barron’s, the integration enables firms to oversee prediction market participation in a similar way to traditional trading. Employees must disclose accounts if they wish to participate, and firms gain the ability to review transactions and investigate suspicious behavior through centralized case management systems.
Kelvin Dickenson, chief product officer at StarCompliance, described the policy framework in practical terms:
“You can engage in this activity, but in order to engage in this activity you have to disclose your accounts to me.”
Rising risks tied to material nonpublic information
Prediction markets have expanded rapidly as platforms such as Kalshi offer contracts tied to real-world outcomes. These products create new exposure for firms, as employees may attempt to profit from material nonpublic information through event-based trades.
Dickenson said prediction markets introduce a new category of compliance exposure.
“Prediction markets represent a rapidly emerging area of employee conduct and MNPI risk,” he said in the company statement.
The system currently focuses on post-trade monitoring. Additional controls may follow, including pre-trade approval requirements if firms demand stricter oversight.
Kalshi expands compliance infrastructure
Kalshi has taken several steps to strengthen compliance as it seeks to attract institutional users. The company recently introduced employer disclosure requirements for markets considered more vulnerable to insider trading. It also launched a whistleblower channel and implemented a risk-scoring process for new markets before listing.
Company data shows early enforcement activity. In the first quarter of 2026, Kalshi conducted more than 150 investigations, blocked over 100 suspected insider trading attempts, and referred 20 cases to law enforcement.
Max Crowley, vice president of business development at Kalshi, emphasized the company’s approach:
“We’ve always been compliance-obsessed at Kalshi.”
Institutional demand drives the partnership
The partnership reflects direct demand from financial institutions. Crowley described a conversation with a large New York hedge fund that wanted to use Kalshi but could not proceed due to missing compliance integration. The response from the fund was clear:
“You don’t have an integration with StarCompliance.”
Kalshi aims to position itself within institutional finance, where compliance systems often determine whether firms can participate at all.
Enforcement cases increase scrutiny on prediction markets
Recent investigations have increased pressure on the sector. NPR reported that U.S. authorities examined suspicious trading tied to a market involving President Donald Trump’s State of the Union address. Kalshi froze the account and referred the case to regulators.
Separate cases linked to another platform, Polymarket, involved allegations of trades based on classified military information and confidential corporate data.
These incidents show the limits of traditional compliance frameworks, which did not account for event-based contracts outside standard securities markets.
Expanding compliance beyond traditional markets
StarCompliance brings more than 25 years of experience in compliance technology and serves firms across global financial markets. Its platform connects employee disclosures, transaction monitoring, and audit workflows in one system.
The new integration extends that framework into prediction markets, a category that continues to evolve alongside regulatory expectations and trading behavior.
Both companies said they will continue adapting the system as the market develops. A joint webinar scheduled for July 16 will include a live demonstration of the product.
Anastasiia G
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