Caitlin Ostroff

It could incentivize people who are either smarter and find different information or know more about an event than the average person to kind of put that out there in a way that can be seen to everyone.

We spoke to their CEO, Shane Coplin, and he was like, you know, the thing with insider trading is that you can see it online.

If there's a suspected insider, like with the Maduro bets, like with the Israel Bet San Ivan, the market can see what's happening and traders can say, hey, I think this is an insider, and maybe that dissuades people from putting money in that market.

You know, there's not really rules about, like, here's the exact parameters of everything you can try and list.

There's not rules around, well, you know, what maybe additional information do you need to collect because the risk of insider trading might be higher here than it is on other types of financial markets.

But Polymarket also has this wider international platform where you can bet on all of these geopolitical markets that aren't on the U.S.

version.

But it is fairly well known that it's not that hard to do that with a VPN.

You just change the country where you appear to be located and you can make all sorts of bets.

Kalshi has always very much maintained that they want to be regulated, that they are trying to be the most secure, most in-line prediction market platform that people can trade on.

And so Kalshi, when you sign up, you have to say who you are.

They collect information on your name, where you live, other basic identifying information that helps clamp down on some of that.

Right, in some cases.

But that being said, it's still really hard to track this.

I mean, if your best friend is, you know, the head of marketing for the company handling the Super Bowl halftime show, like, they wouldn't have a way to know that.

So there's the limits as to what they can actually easily figure out in terms of who has insider information and who doesn't.

So prior to recently, we really hadn't seen much action from regulators on this idea of insider trading on prediction markets.

That changed a little bit a couple of weeks ago when Jay Clayton, who's the head of the SCNY, the Southern District of New York Department of the DOJ,

He said that, you know, prediction markets are something that they're very much looking at and that he thinks could be an area where there's enforcement going into the future.

And so that's kind of the first inkling that we've seen that this is going to be an area where regulators are starting to look more and more at.