Kalshi is strengthening its market surveillance through a new partnership with Nasdaq.
Key Takeaways
- The trading exchange partnered with Nasdaq to “reinforce Kalshi’s commitment to market integrity.”
- The surveillance product will be implemented in phases.
- Kalshi will share surveillance data with the CFTC as part of its regulatory requirements.
The prediction market operator announced Monday that it will use Nasdaq Market Surveillance to monitor its federally regulated platform for insider trading, manipulation, and other market abuse.
“This deal reinforces Kalshi’s commitment to market integrity,” Max Crowley, VP of business development at Kalshi, said in a release. “Implementing Nasdaq Market Surveillance gives our markets the same surveillance data used by the world’s largest exchanges, and it’s built to scale with us as we grow.”
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Surveillance demand
The technology will help Kalshi detect market abuse and other misconduct across its current and future markets as the company expands. Kalshi says it will implement the technology in phases and share the data with the Commodity Futures Trading Commission (CFTC) to meet agency requirements.
More than 50 exchanges and 20 international regulators use the Nasdaq Market Surveillance product to provide trading activity oversight.
“Prediction markets are among the fastest-growing segments of the financial landscape, and they demand surveillance infrastructure with the scale and expertise that can match that pace," said Tony Sio, head of regulatory strategy and innovation at Nasdaq.
Fighting market abuse
There has been a rise in manipulation and insider trading concerns surrounding prediction market sites over the last year. Kalshi has announced multiple partnerships and products to help battle market integrity issues. The prediction market platform recently partnered with Genius Sports, which will provide integrity, data, marketing, and media services for Kalshi’s sports markets.
Kalshi revamped its surveillance and enforcement process earlier this year. In June, the exchange also began requiring additional employee information when it suspects market manipulation. Kalshi has also banned and restricted multiple users, including politicians and athletes, for trading contracts on markets that violate the platform’s rules.
In other prediction market news, Kalshi is entangled in multiple legal battles with states, including New York and Nevada.
