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 potential solely on prediction markets making use of Know Your Buyer (KYC) measures, in accordance 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 instructed Cointelegraph, including that state actors might be restricted from political or geopolitical markets.
“This doesn’t absolutely remove abuse, since insiders can nonetheless share data with third events, but it surely 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, “practically not possible,” Weiler stated.
When wallets should 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 personal data (MPNI), he stated.
“Prediction markets can try to observe uncommon buying and selling habits, cap commerce sizes, or sluggish buying and selling throughout delicate geopolitical durations. Nonetheless, these measures are simply bypassed,” Weiler stated, including:
“Bans concentrating on authorities officers are solely realistically enforceable in KYC-based methods. Whereas all onchain exercise is clear, transparency alone doesn’t remedy the attribution downside. With out id verification, this can be very troublesome to hyperlink an onchain pockets to a particular official, state actor, or insider with confidence.”
Kalshi, Polymarket, Opinion: Who requires KYC and the way?
On the time of writing, KYC necessities fluctuate broadly throughout established prediction platforms comparable to Kalshi and Polymarket, whereas decentralized options don’t seem to require id checks, or can’t technically help them.
Kalshi enforces KYC necessities as a part of its regulated mannequin below 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 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 obligatory id checks, with entry reportedly out there by way of VPN, in accordance to social media stories. 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, gives no public data on KYC necessities.
Cointelegraph approached Kalshi, Polymarket and Opinion for remark relating to KYC necessities however had not acquired 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 stories 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.
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