Investors following prediction markets learned this week that the Kalshi Nasdaq surveillance deal places the exchange on the identical market-monitoring platform its own regulator already runs, tightening the chain between a flagged trade and a formal regulatory file.
Kalshi, the regulated US event-contracts exchange, signed a multi-year agreement to deploy Nasdaq Market Surveillance across its platform. The system will run alongside the Solidus Labs framework already in place since February, covering both Kalshi’s existing prediction markets and the perpetual-style derivatives it is adding. Neither company disclosed the contract value or a phase-in timetable.
What the Kalshi Nasdaq Surveillance Deal Actually Changes
The practical shift is in the reporting architecture. The Commodity Futures Trading Commission (CFTC) adopted the same Nasdaq platform in August 2025, replacing a legacy system that dated to the 1990s and, for the first time, gave the agency automated alerts and cross-market analytics. When Kalshi’s alerts and the CFTC’s alerts now originate from the same engine, trade data reaches the regulator in the format the agency already expects, cutting the steps between a suspicious transaction and an investigator’s desk.
Tony Sio, Nasdaq’s head of regulatory strategy and innovation, described prediction markets as environments that ‘demand surveillance infrastructure with the scale and expertise that can match that pace.’ Writing on the Nasdaq newsroom, Sio had previously framed the CFTC’s own adoption as part of a broader push to monitor crypto, prediction markets, and continuous 24-hour trading from a single platform. Nasdaq says its surveillance technology now runs at more than 50 exchanges and 20 international regulators, and the product offers more than 70 pre-configured alerts alongside customisable algorithms. The company also embedded AI in the investigation workflow in late 2025, automating steps previously done by hand.
This is the fourth surveillance arrangement Kalshi has announced in 2026. Solidus Labs has covered the exchange since February. Kalshi extended that coverage to Kinetic Markets, its futures commission merchant (a firm that executes trades on behalf of clients in regulated derivatives markets), on 3 August. Two further deals point inward: StarCompliance in June and Comply on 4 August both feed staff trading data into employer-compliance software. Comply says its platform serves more than 5,000 firms.
Legal Pressure Is the Context for the Compliance Build-Out
Kalshi’s surveillance expansion is happening alongside a cluster of enforcement actions and lawsuits that have made the exchange one of the most scrutinised venues in US financial markets.
The Santos case gives a sense of what the tools are designed to catch. According to the CFTC’s official order, the agency’s action against former Representative George Santos was its first-ever enforcement action alleging market manipulation in a prediction market. Santos traded a contract on whether he would attend the State of the Union address, buying ‘Yes’ positions before publicly posting on X about his suit choices for the event, a move Akin Gump’s regulatory note describes as designed to move the contract price in his favour. Under the settlement, Santos agreed to give up $17,569.98 in profits, pay a $17,500 penalty, and stay out of CFTC-regulated markets for three years, without admitting wrongdoing. A separate CFTC investigation concerns a White House teleprompter operator alleged to have bet on phrases President Donald Trump would use in speeches; Kalshi froze more than $90,000 in that account.
The bigger legal fight is jurisdictional. New York’s attorney general sued Kalshi on 31 July seeking at least $36 billion in damages and penalties over sports event contracts, which New York treats as unlicensed gambling. According to Northeast Times, the $36 billion is a floor built from three components: full restitution to New York customers, three times Kalshi’s alleged gains from operating in the state, and a $100,000 penalty for every unlicensed sports wager it accepted from a New York user.
The litigation map is uneven. Kalshi self-certified its sports-event contracts with the CFTC in January 2025, prompting a cease-and-desist from New York’s gaming regulator in October 2025. It won preliminary injunctions in Nevada and New Jersey, with the New Jersey victory affirmed by the Third Circuit in a two-to-one ruling, the first federal appellate decision finding that sports event contracts fall under the Commodity Exchange Act’s (CEA) exclusive CFTC jurisdiction. It lost in Maryland and, more recently, lost a preliminary injunction before a New York federal judge on 7 July 2026, with an emergency appeal to the Second Circuit denied on 28 July 2026. Kalshi has moved the NY attorney general’s suit to federal court, rerunning the same CEA preemption argument. A House committee had separately demanded KYC (know your customer) and trade surveillance records from Kalshi and rival Polymarket in May, with a 5 June deadline.
Scale provides context for the stakes. Crypto.news, citing the New York AG’s own release, reported that Kalshi users placed more than $1 billion in bets monthly on the platform in 2025, with 90% of that volume on sports. The exchange carries an estimated valuation of roughly $22 billion and annualised volume of approximately $178 billion. With those figures in the background, a surveillance stack that speaks the same language as its regulator is less a compliance gesture and more a structural necessity. The next test is whether federal courts agree the CEA gives Kalshi the jurisdictional shield it needs to keep the business intact.
