Considerations 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 attainable solely on prediction markets making use of Know Your Buyer (KYC) measures, in keeping 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 might be restricted from political or geopolitical markets.
“This doesn’t absolutely eradicate abuse, since insiders can nonetheless share info with third events, however it provides an necessary 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, “almost inconceivable,” Weiler stated.
When wallets usually are not linked to real-world identities, there isn’t any dependable approach to determine merchants or decide whether or not they have entry to materials private info (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 durations. Nevertheless, these measures are simply bypassed,” Weiler stated, including:
“Bans focusing on authorities officers are solely realistically enforceable in KYC-based programs. Whereas all onchain exercise is clear, transparency alone doesn’t remedy the attribution drawback. With out id 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 fluctuate extensively throughout established prediction platforms corresponding to Kalshi and Polymarket, whereas decentralized options don’t seem to require id 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 info 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 necessary id checks, with entry reportedly accessible by way of VPN, in keeping with social media studies. The platform doesn’t publicly affirm this in its person information.
Opinion, a decentralized prediction market backed by YZi Labs, an organization linked to the previous Binance CEO Changpeng Zhao, offers no public info 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.
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The information comes amid intense scrutiny of main prediction market platforms following high-profile bets tied to geopolitical occasions in Venezuela, together with studies 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 authorities officers from buying and selling on prediction markets once they maintain materials nonpublic info.
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