Goldman Sachs, JPMorgan, and Others Tighten Prediction Market Trading Rules as Insider Trading Concerns Rise

Odaily reported that as prediction markets spark insider trading concerns, Goldman Sachs has prohibited employees from trading prediction market contracts related to the bank’s own events, elections, financial markets, macroeconomic data, and geopolitics. Financial institutions including Morgan Stanley, JPMorgan Chase, and Bank of America are also formulating or updating relevant policies, with Bank of America already clarifying prohibited behaviors in prediction market trading to its employees.

Previously, the U.S. Commodity Futures Trading Commission (CFTC) and the Department of Justice accused a Google employee of using non-public information to trade “Year in Search” related contracts on Polymarket, making a profit of approximately $1.2 million. Legal experts noted that the CFTC still lacks mature precedents in enforcing insider trading rules in prediction markets, and the wide variety of prediction market contracts adds to regulatory challenges.

Currently, Kalshi and Polymarket have respectively launched employment verification tools and partnered with Chainalysis and Palantir to monitor suspicious trading activities. (CNBC)