Companies are updating insider trading policies to cover prediction markets; Kalshi and others are pushing for federal oversight, including of insider trading
Rocket Drew / The Information :
Context & Ripple Effects
Prediction markets are moving closer to the compliance perimeter of conventional financial markets: employers are beginning to treat event contracts as a channel through which employees can misuse nonpublic information. The issue became concrete when an OpenAI employee was fired over prediction-market insider trading.
The platforms are also building their own controls. Polymarket published restrictions on trading on stolen confidential information, illegal tips and outcomes a user can influence, while Kalshi later proposed workplace disclosures for some information-sensitive markets.
First-order effects
- Companies that previously focused insider-trading rules on securities now have to specify whether, and how, those restrictions apply to prediction-market positions.
- Kalshi and other platforms seeking federal oversight are putting market-integrity rules at the center of their case for broader legitimacy.
Second-order effects
- Corporate compliance, legal and HR teams will need to monitor a new class of employee trading risk, particularly where a company’s internal events could resolve a market.
- Platforms face pressure to turn broad integrity commitments into enforceable controls, following Kalshi’s proposed restrictions on relevant insiders and Polymarket’s published trading rules.
Third-order effects
- If employers and platforms converge on comparable restrictions, prediction markets may develop a market-integrity stack resembling other regulated venues, even before a single federal framework is settled.
- Federal oversight could become a competitive variable: platforms able to demonstrate surveillance, eligibility controls and clear rules may be better positioned as the category expands.
The trend: Prediction-market platformization is forcing platforms and employers alike to translate event-based trading into familiar compliance and market-integrity obligations.