So the perception of insiders is pretty bad for prediction markets as a business imo.
The sooner they knock off the rhetoric about the “theory” behind prediction markets and start thinking about it like a business, the sooner they will take insiders seriously.
Although Polymarket is currently spending a lot of money trying to market itself to working-class regular people to get hooked and scam their paychecks out of[0]
[0] https://nypost.com/2026/02/12/us-news/nyc-gets-its-first-fre...
Military operations go awry. Countries react in unexpected ways. Leaders change their minds.
And as a potential event gets closer, insider information changes. Different insiders have different sets of partial knowledge.
You don't even need scheming and tricking. Just regular reality is already complicated enough.
What are the chances of large bets being made by anyone who isn’t an insider?
Conceptually, I think that is the right analogy to think about. Prediction markets "want" to be a more accurate source of information, just like stock markets, so from that lens "getting" information to be more accurate is good. When government officials are placing bets on prediction markets, though, it's a massive violation of operational security, and leaking confidential information. They probably think that they are acting anonymously, but it creates so many opportunities for unfriendly state actors to get information, especially if people do it consistently.
Being indicted for treason and treason like charges sounds worse than the SEC coming after you.
Prediction markets are supposed to be providing the most accurate predictions.
The most accurate predictions come from insider information.
Poeple complaining about insider trading on prediction markets seem to be missing the point. They're supposed to have insider trading. That's the whole idea.
This is not a "crypto prediction market" problem.
Gambling should be judged as any other vice - people get something out of it (rush, hope, whatever) not by rational money allocation standards.
I bring this up because we assume the trading is coming from insiders but I wonder if the parties behind this have baked in a layer similar to my story above.
To close this back to your comment, and I don’t have an answer here: is knowing who the insiders are and acting on that a crime? If you did know and didn’t report them, are you breaking a law? Or worse, you reported it to the deaf ears of a regulator that are focused elsewhere or are under resourced to respond now?
it's legal to follow FBI cars and see who they raid so as to make trades. you could even have a hedge fund specialized on this. it's called alternative data
you can even be a regular employer of a public company and trade based on information sent on internal emails.
the only thing illegal is to be a designated insider - typically a restricted group of people with access to sensitive information
You absolutely cannot.
Even then it would be inaccurate: the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
> the regulators are not too stupid to put two and two together that you work for a company and got incredibly lucky with your trade
You’re implying some specific combination of factors, but it’s not clear what you mean. What qualifies as "timing"? Around earnings, when trading volume is highest or just around some event? And what exactly counts as "lucky"?
Why would regulators scrutinize a sub-$25k purchase of my own company’s stock? That concern feels overstated. Granted, I’m not a lawyer. In practice I can place a trade at any time. If someone is routinely making $20k–$30k transactions, that alone is unlikely to trigger scrutiny.
The claim that you "absolutely cannot do this" is simply incorrect. I stand by that.
Here's a few examples: https://www.sec.gov/spotlight/insidertrading/cases.shtml
Some further advice on the matter: https://www.bloomberg.com/view/articles/2018-08-12/the-10-la...
10 Laws of Insider Trading
1. Don’t do it.
2. Don’t do it by buying short-dated out-of-the-money call options on merger targets.
3. Don’t text or email about it.
4. Don’t do it in your mother’s account.
5. Don’t do it by planting bombs at a company and shorting its stock.
6. Don’t do it while employed at the Securities and Exchange Commission.
7. Don’t Google “how to insider trade without getting caught” before doing it.
8. If you didn’t insider trade, don’t forget and accidentally confess to insider trading.
9. If you are going to insider trade, do it in a company that is far away from a Securities and Exchange Commission office. Like, physically.
10. If you are already under a federal ethics investigation about your ownership or promotion of a stock, don’t insider trade that stock.
Sure. But these aren't trades in "the oil market." They're bets on Polymarket and a specific oil-futures exchange.
Need a strong source for this. The size (and regulatory) disconnect between the two would seem to make making markets in both a bit silly.
https://x.com/peterjliu/status/2024901585806225723
But there is still the problem of knowing which new trades the insiders made before the bet is settled (maybe solved by being an insider of the prediction market), and also since prediction markets need money on both sides (you are betting against other people, not the 'house') when the insiders make their buy they probably eat up most of or all of the action on the other side.