Kalshi Partners with Comply to Monitor Institutional Trading Amid $36B NY Lawsuit

Kalshi is beefing up compliance as it pushes deeper into institutional markets — and it’s doing so amid a high-stakes legal battle that could reshape the future of prediction markets in the U.S. The exchange has struck a partnership with compliance-technology provider Comply to feed Kalshi trading data into Comply’s regulatory monitoring platform, CNBC reports. The integration will let banks, asset managers and other regulated firms track whether employees are trading Kalshi event contracts, flag suspicious activity (including potential use of material non-public information) and enforce firm-specific bans on contracts tied to events employees might influence. Kalshi already runs its own market surveillance, but institutional clients told the company they wanted prediction-market positions visible inside the same workplace-compliance systems they use for stocks, bonds and crypto. The planned rollout would place Kalshi contracts alongside those traditional assets — and the company says the system will also cover planned perpetual-futures products when they launch. That capability addresses a key stumbling block for regulated firms considering exposure to event contracts, which can touch on elections, economic releases, corporate developments and other outcomes that may involve sensitive information. Large financial firms typically require disclosure of outside brokerage accounts and pre-approval for certain trades; extending similar controls to prediction markets could let employers permit limited participation without opening an unmonitored regulatory risk. For Kalshi, the tie-up is also a signaling play: the company wants its contracts treated as regulated financial instruments rather than “bets.” CEO Tarek Mansour has likened Kalshi’s structure to Nasdaq while defending the business in interviews. But beefed-up private surveillance won’t settle the much bigger legal question — whether some event contracts fall under federal derivatives rules or state gambling laws. That legal fight is playing out in New York. Attorney General Letitia James sued Kalshi on July 31, seeking at least $36 billion in damages, penalties and other relief. Kalshi moved the case to federal court in the Southern District of New York; a New York state judge then deemed the state’s preliminary-injunction request moot after the removal, a procedural step that did not dismiss the underlying allegations. Kalshi has warned the state’s claims could imperil the broader event-contract industry. Federal regulators are also involved. The Commodity Futures Trading Commission has sought to block state enforcement actions against federally registered prediction-market operators, and separate court fights over sports-related event contracts continue to test the boundary between federal oversight and state gaming authority. Kalshi’s surveillance push follows a well-publicized CFTC action tied to prediction-market trading: former Rep. George Santos agreed on July 31 to return $17,569.98 in gains, pay a $17,500 civil penalty and accept a three-year ban from trading through CFTC-registered entities after regulators alleged he made misleading public statements while holding contracts related to whether he’d attend President Trump’s State of the Union. Santos neither admitted nor denied the agency’s findings. Kalshi referred that trading to regulators, highlighting how platform monitoring can trigger enforcement. The Comply integration would let employers detect potential conflicts before they escalate into regulatory cases, a feature Kalshi expects will make its platform more palatable to large financial clients. Still, the company’s ability to win over the institutional market — and to expand into new derivatives products — will hinge on how effective those compliance tools prove and how the courts ultimately rule on prediction markets’ legal status.