Prediction markets have moved from niche markets into mainstream financial and political conversation, driven by the rapid growth of platforms such as Kalshi and Polymarket. 

Bloomberg reported that monthly trading across these markets climbed from $1.2bn in January 2025 to more than $20bn a year later, with annualised face value approaching $30bn. As volumes rise, so do concerns over insider trading, adverse selection and manipulation, and these now command growing regulatory and industry attention. Reuters warned that platforms dominated by insiders risk eroding user trust, because “people may not invest at all if they fear being steamrollered by clued-up insiders”. 

The real question for the sector is whether venues can build the systems and processes to support institutional-grade surveillance and regulatory confidence.

Context: the market integrity debate is accelerating

Recent coverage has focused on insider trading, where highly informed participants exploit these markets using material non-public information and asymmetric data access. Bloomberg pointed to academic work suggesting that market makers and sophisticated traders are gaining structural advantages, citing Stanford University research into 41.6 million Kalshi trades that found these firms consistently profited. Institutional participation is climbing too. Virtu Financial, one of the world’s largest high-frequency trading firms, has begun pricing and trading event contracts on Kalshi.

Regulators and platforms are already responding. Kalshi has introduced technological guardrails that block market-sensitive participants such as politicians and athletes from trading in relevant events. Polymarket’s updated integrity rules now cover the use of stolen confidential information and illegal tips, along with activity by anyone able to influence an outcome. Reuters also noted the platform’s partnership with Palantir Technologies to strengthen suspicious-activity monitoring.

Infrastructure requirements are growing more sophisticated

Exberry is seeing growing demand for prediction market technology that can support advanced oversight integration and participant controls, while keeping operations resilient under load. As scrutiny intensifies, providers now weight auditability and live monitoring as heavily as raw execution speed. Attention is shifting to the architecture beneath these venues, and to the matching engine and the surveillance ecosystem around it in particular.

Guardrails must live inside the platform

A modern Central Limit Order Book (CLOB) is where effective oversight begins. Exberry’s matching engine records the full order lifecycle, capturing every placement, modification, cancellation and execution with nanosecond-level timestamps. That guaranteed, orderly audit trail gives pattern-recognition tools the raw data they need to spot potential market abuse and flag suspicious behaviour as it happens.

Controls stop abuse before it takes hold: dynamic price collars, fat finger guards, volume & value pre-order checks, and trading volume limits. Circuit breaker and dynamic price band functionality works alongside them, underpinning adaptive responses such as widening spreads or triggering ad hoc auctions when activity looks irregular, protecting liquidity providers without halting the wider book. 

Drop Copy streams activity to external monitoring and compliance systems, while Reporting APIs let surveillance teams query by instrument, account and time range. Progressive KYC links verification status to pre-trade risk screening and position validation, so venues can match identity requirements to account size or trading behaviour.

Market design enters the integrity conversation

Market structure itself can reduce integrity risk, including the threat of potential insider trading. Bloomberg highlighted the problem of adverse selection, where informed traders systematically profit at the expense of everyone else. An ultra-low latency CLOB, able to process up to one million orders per second at sub-20-microsecond response times, gives venues the performance headroom to intervene intelligently. That guarantees an orderly market under extreme stress, holding firm when trading surges around major events.

Deterministic order handling keeps execution predictable through volatile, information-sensitive events, and support for FIX alongside binary and JSON protocols then lets established trading firms and modern market makers connect with minimal friction. 

Beyond that, the same flexible design leaves room for what comes next, from segmented trading environments and differentiated participant tiers to new settlement models for specific event contracts. Its architecture can also extend to other asset classes, such as perpetuals and other futures, as well as options.

Build market integrity into the foundations

Prediction markets are maturing into a regulated, institutional phase. The venues that thrive will be those that design in integrity from day one. Exberry’s dedicated prediction market solution supports binary, yes/no and multi-outcome event contracts on a regulation-ready foundation, giving providers the audit trails and live controls that surveillance increasingly demands.

Find out more about how Exberry’s prediction market technology helps providers build scalable, surveillance-ready trading venues: https://www.exberry.io/prediction-market-matching-engine-exberry/