Kalshi, Polymarket face surge in suspicious trades as volumes rise
Kalshi said it flagged more than 400 suspicious trades since January, more than twice all of 2025. Polymarket’s volumes topped $1.5 billion as regulators intensified scrutiny.
Kalshi and Polymarket are confronting a fast-rising problem as trading volumes climb: a wave of bets the platforms themselves now view as suspicious. The issue cuts to the heart of prediction markets’ appeal, contracts tied to elections, policy, sports and financial developments that promise to price probabilities in real time. But the same speed and openness that draw users also make abuse harder to spot.
Kalshi has investigated and flagged more than 400 suspicious trades since the start of 2026, more than double the number it reviewed across all of 2025. Some of those cases were referred to the Commodity Futures Trading Commission. Polymarket has also seen a notable increase in suspicious activity. Its 2026 predictions page listed 106 active markets and more than $1.5 billion in trading volume, while its Balance of Power: 2026 Midterms market had topped $6.7 million in volume as of May 15.
The regulatory response has tightened alongside the growth. On February 25, the CFTC’s Division of Enforcement issued an advisory after two enforcement cases involving misuse of nonpublic information and fraud on Kalshi event contracts. On April 22 and 23, Kalshi and the CFTC announced disciplinary and enforcement actions targeting insider trading in event contracts. The CFTC’s Division of Market Oversight also issued a separate prediction markets advisory warning designated contract markets about their regulatory obligations as the sector expanded rapidly.
Washington is treating the business as more than a niche betting product. The CFTC has repeatedly asserted exclusive federal jurisdiction over prediction markets in 2026 court filings and press releases, including fights involving Wisconsin, New York, Massachusetts and Ohio. Separately, federal prosecutors in New York met with Polymarket representatives on March 30 to discuss how insider-trading laws might apply to suspicious bets. For prediction markets to keep growing, their operators will have to show they can detect abuse, review it quickly and stop it before confidence in the prices themselves starts to crack.
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