Kalshi, the only CFTC-registered Designated Contract Market for event contracts, has partnered with Solidus Labs to layer advanced trade surveillance technology across its platform. The move is designed to catch market manipulation, insider trading, and other abuses across Kalshi’s catalog of more than 4,000 active markets.
Solidus Labs brings monitoring expertise drawn from both crypto markets and traditional finance. Kalshi already runs internal surveillance systems. The Solidus integration is meant to augment those capabilities with more sophisticated pattern detection, the kind that can flag wash trading, spoofing, or suspicious activity tied to real-world events before they become regulatory headaches.
This isn’t Kalshi’s only recent compliance move. The platform also partnered with StarCompliance to monitor its own employees’ trades in real-time, giving compliance teams visibility into potential conflicts of interest. On top of that, Kalshi has an existing relationship with IC360 for sports-specific monitoring and has established a dedicated surveillance advisory committee.
The regulatory battlefield
The backdrop to this partnership is a genuinely messy regulatory landscape. The CFTC has jurisdiction over Kalshi as a registered DCM, which means the platform operates under the same federal oversight framework as traditional derivatives exchanges. But several state regulators have pushed back, arguing that event-based contracts, particularly those tied to sports and elections, are gambling products that fall under state authority.
The Third Circuit issued a ruling supporting CFTC preemption over sports-related contracts, which gave platforms like Kalshi some legal breathing room. But the patchwork of rulings across different circuits means the jurisdictional question is far from settled.
Why this matters for the broader prediction market space
Prediction markets have experienced a surge in popularity, driven partly by crypto-native platforms like Polymarket that attracted massive volumes during recent election cycles. But Polymarket and similar platforms operate in a different regulatory universe, one that’s largely outside US jurisdiction and lacks the compliance infrastructure that institutional players demand.
Kalshi’s approach creates an interesting contrast. Where crypto-native prediction markets have leaned into permissionless access and minimal KYC, Kalshi is building what amounts to a regulated futures exchange for events. The Solidus partnership reinforces that positioning by adding a surveillance layer that institutional compliance teams can actually evaluate and trust.