Josh Stevens, VP of Engineering at Polymarket, denied reports indicating that the prediction market platform would shift to a model requiring full customer ID for its operations. Kalshi’s Head of Enforcement, Robert J. DeNault, called Polymarket to enhance its compliance policies, as insiders were “using the platform left and right.”
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Key Takeaways:
- Josh Stevens denied adding KYC to existing Polymarket services but faces Kalshi pressure to comply next.
- On May 22, James Comer launched a probe into Kalshi and Polymarket over compliance and insider trading data.
- As compliance rules impact the industry, Kalshi and Polymarket both revamped their surveillance system ahead of this year’s Super Bowl.
Kalshi Criticizes Polymarket’s Compliance Policies: ‘Enough is Enough’
Prediction markets, which are now under increased regulatory oversight in the U.S., are refining their compliance policies. Nonetheless, Kalshi and Polymarket, the top two companies in the market, face this process differently.
Recent reports indicated that Polymarket, which operates under a dual structure, would be gearing up to introduce identity checks on its platform to avoid the use of virtual private networks (VPNs) to sidestep its geofencing restrictions.
The reports stated that users completing this verification would gain access to perks such as direct co-location to reduce trading latency.
Nonetheless, Josh Stevens, VP of Engineering at Polymarket, stressed that these reports were false and that the current verifications would be linked to a new product in testing stages.
“No KYC is being added to any part of existing polymarket.com with this launch. Once this product is out of beta no KYC will be required to use it,” he explained.
Kalshi’s Head of Enforcement, Robert J. DeNault, criticized Stevens’ statements, expressing outrage at the lack of compliance measures from Polymarket’s offshore operation. He stressed that Iranians and Russians were using the platform and that the company had been sending merch to a user in Moscow to recruit more Russian users.
“Enough is enough… If Polymarket is serious about stopping this, either bring all operations into compliance (which starts with KYC) or shut down the offshore exchange. What exists now is not a safe or fair platform to offer prediction markets,” he declared.
Both Polymarket and Kalshi have been strengthening their compliance operations targeting insider trading operators. Kalshi revamped its anti-insider trading strategy ahead of this year’s Super Bowl, enhancing its active surveillance system, called Poirot, and enrolling top executives to handle these cases.
Polymarket, on the other hand, has implemented a new updated ruleset that typifies several insider trading activities, helping to identify and curb them.
On May 22, Rep. James Comer, Chairman of the House Committee on Oversight and Government Reform, announced a probe into Kalshi and Polymarket, sending letters requesting data on the identification processes applied and insider trading mitigation plans approved.
