Kalshi openly warned Polymarket to strengthen its identity controls, otherwise it would have to close its offshore platform. The dispute between the two leaders of the predictive markets escalated in mid-May, when the American Congress launched its own investigation into the two leaders. Two opposing visions of compliance now clash in an industry under increasing regulatory scrutiny.
In brief
- Josh Stevens (Polymarket) denies the introduction of KYC on the existing site; the current process would concern a new product in beta.
- Robert J. DeNault (Kalshi) calls for full compliance or closure of the Polymarket offshore platform.
- On May 22, Representative James Comer launched an investigation into the two platforms, requesting data on KYC procedures and anti-insider trading plans.
Polymarket denies, Kalshi counterattacks
Recent reports indicated that Polymarket plans to introduce identity verifications to block VPN usage, with benefits like direct co-location for verified users. Josh Stevens, vice president of engineering, strongly denied the reports.
“No KYC procedures are being added to any part of the existing polymarket.com site during this launch. Once out of its stupid phase, this product will not require KYC either “, he clarified on X.
Robert J. DeNault, head of compliance at Kalshi, did not give up, however. He points out concrete flaws: Iranian and Russian users active on the platform, and even a delivery of goods to Moscow to recruit new users. His conclusion is straightforward.
Enough is enough… If Polymarket really wants to put an end to this, either bring all its operations into compliance (starting with the KYC procedure) or close its offshore platform. What currently exists is neither safe nor fair for providing prediction markets.
Congress opens formal investigation
On May 22, Representative James Comer, chairman of the House Committee on Oversight and Government Reform, announced a formal investigation aimed at both platforms. Letters have been sent requesting data on current identification processes and validated anti-insider trading schemes.
On this last point, the two rivals had nevertheless anticipated. Ahead of this year's Super Bowl, Kalshi modernized Poirot, its active surveillance system, by directly involving its senior executives in handling sensitive cases. Polymarket, for its part, has deployed updated regulations to better identify and curb insider practices.
Regulatory pressure is therefore intensifying on a sector which, after the enthusiasm of the last American elections, is still seeking to lay solid legal foundations.
In short, this standoff illustrates a structural tension: Polymarket is banking on the flexibility of its dual model to capture as many global users as possible, while Kalshi is playing the card of total compliance as a competitive advantage. The Congressional investigation, combined with peer pressure like Kalshi, risks accelerating arbitrations. KYC, long postponed, is inevitably approaching.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
