"This activity has some people setting their hair on fire, figuring this type of activity must be illegal. But for now, it's sort of open season for insider trading on some prediction markets. The CFTC, which oversees them, doesn't have a deep track record of going after that type of activity, unlike the SEC, which oversees the stock market. In fact, the main rule on the books about it that could apply is only 15 years old."
"In December, someone on Polymarket made $1 million when they went 22 for 23 on guessing Google's most searched terms of the year. Some platforms, such as Kalshi, explicitly ban insider trading, while others, like Polymarket, are more lenient on the practice. Heck, Manifold Markets, a smaller competitor, even encourages it (though it doesn't generally use real money). And regardless of the official rules, there's only so much anyone can do to track it."
A newly created account on Polymarket placed $30,000 on Nicolás Maduro's exit just before his capture and turned it into over $400,000. Prediction markets let people bet on events ranging from sports to elections and have produced other large wins, including a December Polymarket user who earned $1 million guessing Google's most-searched terms. Concerns arise about traders using private or insider information to profit. Regulatory oversight is limited: the CFTC supervises some markets but lacks a strong enforcement record, the SEC enforces securities markets, and the main applicable rule is only fifteen years old. Platforms set differing policies and practical monitoring remains difficult.
Read at Business Insider
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