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OpenAI fires an employee for prediction market insider trading

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Re: OpenAI fires an employee for prediction market insider trading

#21

Post by cc-d »

Analemma_ wrote: post #13
helsinkiandrew wrote: post #8

Interestingly Kalshi has ‘banned’ insider trading, whilst polymarkets often tweets that some of their users must have inside information https://news.kalshi.com/p/kalshi-trading-violation-enforceme... https://x.com/polymarketmoney/status/2001056273500954784?s=4...

Manifold actually explicitly encourages insider trading, arguing that it leads to more accurate pricing. This was possibly defensible back when it was a cute funtime project run by a Bay Area polycule, but it’s probably going to get them in deep shit sooner or later, even though they don’t even use real-money betting.

The SEC only exists for dad to frame people.

The vast majority of insider trading schemes are not prosecuted, many leave no evidence trail at all without going deep into black-op classified territory.

Re: OpenAI fires an employee for prediction market insider trading

#22

Post by [deleted] »

senkora wrote: post #11

EDIT: I am wrong, see children > The employee, she said, “used confidential OpenAI information in connection with external prediction markets (e.g. Polymarket).” Note that “insider trading” is not illegal on prediction markets. The particular issue here is that the employee “disclosed” confidential information on a public forum by influencing the prices assigned to certain outcomes by prediction markets.

[deleted]

Re: OpenAI fires an employee for prediction market insider trading

#24

Post by [deleted] »

agency wrote: post #15
senkora wrote: post #11

EDIT: I am wrong, see children > The employee, she said, “used confidential OpenAI information in connection with external prediction markets (e.g. Polymarket).” Note that “insider trading” is not illegal on prediction markets. The particular issue here is that the employee “disclosed” confidential information on a public forum by influencing the prices assigned to certain outcomes by prediction markets.

I don't think this is true, though enforcement is another thing and the standard is different than in securities markets. Prediction markets are regulated by the CFTC and the insider trading standard is “misappropriation of confidential information in breach of a pre-existing duty of trust and confidence to the source of the information” (vs any “material non-public information” for securities) https://www.cftc.gov/P…

[deleted]

Re: OpenAI fires an employee for prediction market insider trading

#25

Post by ruined »

xrd wrote: post #3

A fun aside: this person obviously created a bunch of new Bitcoin accounts to hide their activity. It makes you think that if you were able to surreptitiously add malicious side channel software into a popular npm package that you wouldn't just need to hunt for crypto wallets with balances. You could also probably find a market for crypto wallets with small balances or zero balances. The history and date of creation…

you can't "change the password" on a wallet, so a "used" wallet is highly unattractive. anything you put in it could be taken by the original keyholder who sold it to you.

Re: OpenAI fires an employee for prediction market insider trading

#26

Post by crazygringo »

cjonas wrote: post #5

Insider trading is so trivial on the prediction markets. I'd guess that it's actually the "feature" that results in the outcomes being so accurate.

Yup. There are good reasons why it's a problem in financial markets but NOT usually a problem in prediction markets:

https://www.economist.com/leaders/2026/02/18/why-insider-tra...

> In prediction markets, informed trading is not a crime or an injustice—it is a valuable service.

A big exception, however, is using prediction markets to make predictions on events regarding publicly traded companies.

Re: OpenAI fires an employee for prediction market insider trading

#27

Post by throwaway5752 »

7777777phil wrote: post #19

77 suspicious positions across 60 wallets, 13 brand-new accounts appearing 40 hours before the browser launch. First confirmed case of a major tech company firing over prediction market trades. I wrote about why prediction markets have a structural insider trading problem that nobody's solved yet: https://philippdubach.com/posts/the-absolute-insider-mess-of...

Prediction markets exist to bypass gambling restrictions and monetize insider trading. It isn't a problem, it is their raison d'etre.

Re: OpenAI fires an employee for prediction market insider trading

#28

Post by gtowey »

7777777phil wrote: post #19

77 suspicious positions across 60 wallets, 13 brand-new accounts appearing 40 hours before the browser launch. First confirmed case of a major tech company firing over prediction market trades. I wrote about why prediction markets have a structural insider trading problem that nobody's solved yet: https://philippdubach.com/posts/the-absolute-insider-mess-of...

Insider trading is the raison d'etre of these products.

Re: OpenAI fires an employee for prediction market insider trading

#29

Post by gtowey »

throwaway5752 wrote: post #27
7777777phil wrote: post #19

77 suspicious positions across 60 wallets, 13 brand-new accounts appearing 40 hours before the browser launch. First confirmed case of a major tech company firing over prediction market trades. I wrote about why prediction markets have a structural insider trading problem that nobody's solved yet: https://philippdubach.com/posts/the-absolute-insider-mess-of...

Prediction markets exist to bypass gambling restrictions and monetize insider trading. It isn't a problem, it is their raison d'etre.

Jinx!

Re: OpenAI fires an employee for prediction market insider trading

#30

Post by Hamuko »

gtowey wrote: post #28
7777777phil wrote: post #19

77 suspicious positions across 60 wallets, 13 brand-new accounts appearing 40 hours before the browser launch. First confirmed case of a major tech company firing over prediction market trades. I wrote about why prediction markets have a structural insider trading problem that nobody's solved yet: https://philippdubach.com/posts/the-absolute-insider-mess-of...

Insider trading is the raison d'etre of these products.

Yeah, Polymarket is explicitly advertising this.

>Research shows prediction markets are often more accurate than experts, polls, and pundits. Traders aggregate news, polls, and expert opinions, making informed trades. Their economic incentives ensure market prices adjust to reflect true odds as more knowledgeable participants join.

>If you’re an expert on a certain topic, Polymarket is your opportunity to profit from trading based on your knowledge, while improving the market’s accuracy.

You know what's a great knowledgeable participant? An insider.

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