Considerations over insider buying and selling on prediction markets have intensified after a collection of high-profile bets on geopolitical occasions, prompting contemporary questions on whether or not it is even possible to curb such practices within the rising business sector.
Stopping insider buying and selling is realistically doable solely on prediction markets making use of Know Your Buyer (KYC) measures, in line with Austin Weiler, a analysis analyst on the blockchain intelligence agency Messari.
“For KYC’d platforms, the simplest mechanism is to limit entry upfront for customers to particular markets,” Weiler advised Cointelegraph, including that state actors may very well be restricted from political or geopolitical markets.
“This doesn’t totally remove abuse, since insiders can nonetheless share data with third events, however it provides an vital impediment and raises enforcement requirements,” he famous.
The issue with non-KYC prediction markets
For non-KYC, or totally on-chain prediction markets, enforcement is extraordinarily difficult and, in some instances, “practically inconceivable,” Weiler mentioned.
When wallets aren’t linked to real-world identities, there isn’t a dependable option to establish merchants or decide whether or not they have entry to materials personal data (MPNI), he mentioned.
“Prediction markets can try to observe uncommon buying and selling habits, cap commerce sizes, or gradual buying and selling throughout delicate geopolitical durations. Nonetheless, these measures are simply bypassed,” Weiler mentioned, including:
“Bans concentrating on authorities officers are solely realistically enforceable in KYC-based methods. Whereas all onchain exercise is clear, transparency alone doesn’t clear up the attribution downside. With out identification verification, this can be very tough 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 corresponding to Kalshi and Polymarket, whereas decentralized options don’t seem to require identification checks, or can’t technically assist them.
Kalshi enforces KYC necessities as a part of its regulated mannequin underneath the authority of the US Commodity Futures Buying and selling Fee. On its sign-up web page, Kalshi states that it requires primary private data from customers and will 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 necessary identification checks, with entry reportedly out there by way of VPN, accordingly it social media reviews. 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 relating to KYC necessities however had not obtained any response on the time of publication.
Associated: Tennessee sends cease-and-desist letters to Kalshi, Polymarket, Crypto.com
The information comes amid intense scrutiny of main prediction market platforms following high-profile bets tied to geopolitical occasions in Venezuela, together with reviews 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, geared toward barring authorities officers from buying and selling on prediction markets after they maintain materials nonpublic data.
Journal: How crypto legal guidelines modified in 2025 — and the way they’re going to change in 2026
