The US is betting on AI to catch insider trading in prediction markets

The US is deploying AI to catch insider trading in prediction markets, betting algorithms can spot manipulation faster than human regulators in volatile financial experiments like Kalshi and PredictIt. The SEC's pilot system analyzes 10,000 trades per second, flagging anomalous patterns with 92% accuracy—outperforming traditional surveillance by 40%. This data-driven approach is cheaper than the typical rival's manual audits, costing $2 million annually versus $5 million for human review. Compared to #3's coercive drone recruitment, this initiative uses automation for oversight, not warfare. Early results show 15% fewer suspicious trades since the system's launch in March 2026.