Svmuu News: As concerns about insider trading related to prediction markets have emerged, Goldman Sachs has banned employees from trading prediction market contracts related to the bank’s own events, elections, financial markets, macroeconomic data, and geopolitical developments.Financial institutions such as Morgan Stanley, JPMorgan Chase, and Bank of America are also developing or updating related policies; Bank of America, for instance, has already begun clarifying to employees the prohibited activities regarding prediction market trading.
Previously, the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice charged an Google employee with using non-public information to trade contracts related to the “Annual Search” on Polymarket, reaping profits of approximately $1.2 million.Legal experts note that the CFTC still lacks established precedents for enforcing insider trading laws in prediction markets, and the wide variety of prediction market contracts further complicates regulatory efforts.
Currently, Kalshi and Polymarket have each launched employment verification tools and are collaborating with Chainalysis and Palantir to monitor suspicious trading activity. (CNBC)