Mandatory KYC and Surveillance

Kalshi's exchange clears thousands of transactions and millions of dollars each day. As part of its compliance with CFTC regulations that govern the exchange, Kalshi employs procedures both at onboarding and across the exchange to identify users and detect anomalous or illicit trading activity.

Know-Your-Customer procedures at onboarding sufficient to identify every customer who transacts on the exchange. These procedures include the collection of name, address, and other identification material – including documents or social security numbers – until a potential member's identity has been sufficiently verified. No user is permitted to trade on Kalshi until this process is completed.

You can read more about Kalshi's KYC procedures, including persons who are screened from the platform, in the Customer Identification section.

After users start trading on Kalshi, their trading activity is subject to ongoing monitoring and surveillance by the exchange. Specifically, Kalshi deploys internal surveillance tools to monitor each and every market that is open for trading activity on the platform. When anomalous or suspicious activity is detected, the surveillance system alerts the Compliance team which may initiate an investigation. Throughout the investigation, the user's account typically remains frozen, and any funds on the platform remain frozen and unable to be withdrawn.

Under Kalshi's exchange rules, reviewed and approved by the CFTC, Kalshi users must comply with any and all requests for additional information issued in connection with an investigation or inquiry. This may include, but is not limited to, being interviewed by the Kalshi Compliance team or submitting additional documents, information, or material to the exchange. If any user does not comply with these investigative requests, their account will remain frozen and they may be subject to exchange discipline.

Kalshi utilizes services from third party vendors who specialize in trading surveillance and monitoring. These include IC360, which assists with monitoring of sports markets on the Kalshi exchange. These vendors generate alerts and provide additional analysis of markets that present increased risk for market manipulation or insider trading.

As part of an ongoing effort to continue to expand its surveillance capabilities as prediction markets increase in popularity and trading activity, Kalshi also partners with academic institutions to audit its surveillance functions and develop cutting edge surveillance tools unique to prediction markets.