“prediction markets are a surveillance blind spot where insiders pocket $143 million in anomalous profits”
Screens 93,000 Polymarket markets and flags traders with a 69.9% win rate, more than 60 standard deviations above chance, estimating $143 million in anomalous profits. Documents specific cases from geopolitical events to celebrity announcements where wallets appear to trade on material non-public information. Proposes a regulatory framework combining platform-level registration, contract-level restrictions on high-risk categories, and an extended misappropriation doctrine to close the legal gaps that leave prediction market insider trading largely unpoliced.
Extensive technical background assumed
Platforms mentioned: Polymarket, Kalshi