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.
>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.
I have come to the opinion that every successful tech company is basically just an arbitrage scheme to avoid regulations and extract value based on that advantage.
Airbnb for unlicensed hotels. Uber for unlicensed taxis. Amazon for whitewashing fraudulent products. Bitcoin for unlicensed securities and laundering money.
That's what happens when the majority of people don't actually support the regulations.
If people thought it was wrong to be an unlicensed airbnb or uber, they wouldn't use them. In reality, those regulations are mostly protection rackets and most people don't care about violating them.
From an economic perspective the majority of those regulations destroy economic value and those companies are unlocking value by finding clever ways around them.
No, they just shift the economic downsides to someone else so they can collect the difference. That's what I mean by arbitrage. Someone always pays the price, and now it's you and I.
I can't say this for the companies listed above but atleast within the realm of social media, they also want to bypass regulations and well, we all know how's it going.
On a long term, I do feel like there will be a drop in producitivity, thus destruction of economic value because of lack of enforcement of policies/such companies having reckless attitude about them.
Many of the products listed above actually seem to be very rent-seeking in my opinion (IIRC Someone on HN once said that from their personal experience talking to drivers, uber takes an approximate at the very least 40% cut or more)
(This might be a little off-topic?_ but one thing I think about tech regulations is that Facebook used to see if a young girl/minor girl took a selfie and then if they don't upload it, detect that she was insecure and then try to show them face beauty recommendations.
These girls can be our sisters/daughters fwiw. Facebook profits from insecurity/rage-bait and I would say that many social medias are the same as well, its just that the facebook example to me feels so eggregious and should be a uniting front for many to agree that there's a problem indeed.
You will be right when you say economical value is generated from profiting from insecurity/bypassing regulations but at what cost?
Yeah but someone has to give the money to the insider traders.
Betting and insider gambling wouldn’t work if people were educated and just didn’t gamble and so never used these platforms in the first place.
It’s an old question of whether government is responsible to protect people from themselves or should we give everyone freedom to go bankrupt in this specific way if they so desire.
I don’t know if there is a healthy way to gamble really. With drugs and substances at least there is some continuous spectrum but you either gamble your money or not.
The concept of a valuable service falls apart if players can influence the actual event. Without equal footing and basic honesty, you aren't measuring reality so much as you are subsidizing those with the power to manipulate it.
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 would be the value to some.
This openai employee should have gone on the dark web to buy older addresses to cloak their activity.
It's sad to say that almost all crypto use cases point to fraud. I'm excited about crypto and there is some fascinating research around anonymous transactions (like zcash). But, that real utility is always overshadowed by the actions of charlatans or worse.
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.
Right but if you have the forethought to go buy such a wallet, you could just make one yourself in advance and create a transaction history.
Although I would argue that even this doesn't have much value. It's not a big problem that people know "there exists an insider at OpenAI". There are plenty of employees there that shield you from being discovered.
In fact it would be so difficult to find this person among them, assuming the most basic opsec, that I'm highly skeptical they actually fired anyone. I would sooner assume this is just an announcement designed to discourage the behavior, since no specifics are provided.
You are giving a lot of credit to this criminal. I really doubt they thought about this long in advance of the crime. Are you suggesting they got hired at openai so they could make calculated wagers at Kalshi? This was more likely a crime made impulsively.
First of all I'm not sure what they did is criminal. And it would have been Polymarket.
Nonetheless, you can just be a pre-existing OpenAI employee. As long as you take basic precautions, they (as in, OpenAI), are not going to be able to find out it was you.
Not in this context it's not. Companies can't create Polymarket accounts. Polymarket accounts are just email addresses or alternatively crypto wallets. And there's no purpose I can imagine to aging them.
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 vast majority of insider trading schemes are not prosecuted, many leave no evidence trail at all without going deep into black-op classified territory.
> 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/PressRoom/SpeechesTestimony/phamstateme...
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.
I have come to the opinion that every successful tech company is basically just an arbitrage scheme to avoid regulations and extract value based on that advantage.
Airbnb for unlicensed hotels. Uber for unlicensed taxis. Amazon for whitewashing fraudulent products. Bitcoin for unlicensed securities and laundering money.
The pattern is upsetting.
That's what happens when the majority of people don't actually support the regulations.
If people thought it was wrong to be an unlicensed airbnb or uber, they wouldn't use them. In reality, those regulations are mostly protection rackets and most people don't care about violating them.
From an economic perspective the majority of those regulations destroy economic value and those companies are unlocking value by finding clever ways around them.
No, they just shift the economic downsides to someone else so they can collect the difference. That's what I mean by arbitrage. Someone always pays the price, and now it's you and I.
I can't say this for the companies listed above but atleast within the realm of social media, they also want to bypass regulations and well, we all know how's it going.
On a long term, I do feel like there will be a drop in producitivity, thus destruction of economic value because of lack of enforcement of policies/such companies having reckless attitude about them.
Many of the products listed above actually seem to be very rent-seeking in my opinion (IIRC Someone on HN once said that from their personal experience talking to drivers, uber takes an approximate at the very least 40% cut or more)
(This might be a little off-topic?_ but one thing I think about tech regulations is that Facebook used to see if a young girl/minor girl took a selfie and then if they don't upload it, detect that she was insecure and then try to show them face beauty recommendations.
These girls can be our sisters/daughters fwiw. Facebook profits from insecurity/rage-bait and I would say that many social medias are the same as well, its just that the facebook example to me feels so eggregious and should be a uniting front for many to agree that there's a problem indeed.
You will be right when you say economical value is generated from profiting from insecurity/bypassing regulations but at what cost?
Prediction markets exist to bypass gambling restrictions and monetize insider trading. It isn't a problem, it is their raison d'etre.
Yeah but someone has to give the money to the insider traders.
Betting and insider gambling wouldn’t work if people were educated and just didn’t gamble and so never used these platforms in the first place.
It’s an old question of whether government is responsible to protect people from themselves or should we give everyone freedom to go bankrupt in this specific way if they so desire.
I don’t know if there is a healthy way to gamble really. With drugs and substances at least there is some continuous spectrum but you either gamble your money or not.
>I don’t know if there is a healthy way to gamble really.
The majority of gamblers keep it within limits, only a small minority lack that control and inevitably end up impoverishing themselves.
Jinx!
Archived version: https://archive.ph/XWrTA
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.
The concept of a valuable service falls apart if players can influence the actual event. Without equal footing and basic honesty, you aren't measuring reality so much as you are subsidizing those with the power to manipulate it.
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 would be the value to some.
This openai employee should have gone on the dark web to buy older addresses to cloak their activity.
It's sad to say that almost all crypto use cases point to fraud. I'm excited about crypto and there is some fascinating research around anonymous transactions (like zcash). But, that real utility is always overshadowed by the actions of charlatans or worse.
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.
I don't really understand. You can create wallets at will. What would be the value of one that someone else happened to create?
If it has a small transaction history it obscure the owners intentions. An address created right before a wager is obviously for one purpose.
Right but if you have the forethought to go buy such a wallet, you could just make one yourself in advance and create a transaction history.
Although I would argue that even this doesn't have much value. It's not a big problem that people know "there exists an insider at OpenAI". There are plenty of employees there that shield you from being discovered.
In fact it would be so difficult to find this person among them, assuming the most basic opsec, that I'm highly skeptical they actually fired anyone. I would sooner assume this is just an announcement designed to discourage the behavior, since no specifics are provided.
You are giving a lot of credit to this criminal. I really doubt they thought about this long in advance of the crime. Are you suggesting they got hired at openai so they could make calculated wagers at Kalshi? This was more likely a crime made impulsively.
First of all I'm not sure what they did is criminal. And it would have been Polymarket.
Nonetheless, you can just be a pre-existing OpenAI employee. As long as you take basic precautions, they (as in, OpenAI), are not going to be able to find out it was you.
Aged accounts, shell companies, it's a market
Not in this context it's not. Companies can't create Polymarket accounts. Polymarket accounts are just email addresses or alternatively crypto wallets. And there's no purpose I can imagine to aging them.
> created a bunch of new Bitcoin accounts to hide their activity
tell me you don’t understand crypto without telling me you don’t understand crypto.
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.
Though Manifold only uses their non-withdrawable play currency Mana.
I can't believe these markets are still legal
Why would Washington ban their staffers' bonus program?
https://archive.ph/FOet2
Prediction market, either gambling or inside trading.
That’s pretty common, you may think you own the data you work on, but you don’t. It’s proprietary confidential.
why would you think you own data you work on
> you may think you own the data you work on, but you don’t
It's called <open>AI.
Bad leaders get bad followers.
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/PressRoom/SpeechesTestimony/phamstateme...
It is most definitely against the rules of the sites and illegal, especially on kalshi