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Mr Kalsi announced on Tuesday that the bank would roll out measures to crack down on insider trading, including requiring traders to provide employment details and providing whistleblower services.
The platform said it would make these changes “with immediate effect” after an advisory committee called for stronger measures. Kalsi said traders in certain markets will be asked to provide employment details.
The move comes amid increased scrutiny of possible insider trading in prediction markets. Federal prosecutors in May indicted a Google employee on fraud charges, noting that the employee made more than $1 million from Polymarket’s insider information.
The Wall Street Journal first reported that Kalsi would require traders to disclose the identity of their employers in certain cases.
Kalsi said it will offer three features, including risk scoring, which provides a “risk score” for markets where there is potential for insider trading or manipulation risk. The platform offers six ways to measure market risk, including whether there are national security concerns and whether the market is acceptable under current regulations.
If the market score meets certain benchmarks, participants will request proof of employment. Kalsi said it would screen traders “before any trades take place.”
The platform will also have enhanced whistleblowing capabilities, allowing traders to report fraudulent trading activity in any market at any time. The platform has built an “internal alert control” that collects whistleblowing information from traders and sends it to its monitoring team.
“By implementing these new prudential measures, we continue to lead the industry on market integrity issues in federally regulated prediction markets,” said Carsi Executive Director Robert Denor.
For the first quarter, Kalsi said the company stopped more than 100 potential insider trading cases using new screening tools.
Kalsi said the commission will continue to provide quarterly reports.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
