7 ms·
OpenAI fires an employee for prediction market insider trading
- shevy-java 9mo agoWe can not trust these AI corporations and organisations.
- bookofjoe 9mo agohttps://archive.ph/FOet2 https://archive.ph/FOet2
- xrd 9mo agoA 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.
- 0x3f 9mo agoI don't really understand. You can create wallets at will. What would be the value of one that someone else happened to create?
- xrd 9mo agoIf it has a small transaction history it obscure the owners intentions. An address created right before a wager is obviously for one purpose.
- 0x3f 9mo agoRight 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.
- xrd 9mo agoYou 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.
- 0x3f 9mo agoFirst 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.
- TZubiri 9mo agoAged accounts, shell companies, it's a market
- 0x3f 9mo agoNot 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.
- TZubiri 8mo agoI'm confused, why would companies be unable to create Polymarket accounts. By talking about aged accounts and shell companies, I meant that there's black markets for aged accounts from social media platforms, and there's markets for shell companies (and to some extent warmed up emails). In both cases the age of the company gives it some value, as anyone doing due diligence on the accounts will weigh the age of the account as a positive signal. Age of an account is a costly signal and significantly slows down Sybil attacks. Spammers pay some cost for aged accounts (even if it's just waiting and holding the inventory) and for defenders it works as a PoW system, they don't need to ignore the age signal, it works just fine.
- 0x3f 8mo agoThere's just no distinction between accounts like that, 'accounts' are just crypto wallets. There's no system that would ever care about the 'age' of your account here. There's no DD. If you have a wallet, you can participate. The 'spam' prevention measure is the same as for any crypto thing: tx costs.
- dontknowbtc 9mo ago> 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.
- ruined 9mo agoyou 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.
- asah 9mo agojust move it to a new wallet
- JasonADrury 9mo agoOh but you can. You can swap out the seed and generate any new addresses using that. Yes, the old addresses will be compromised. That's fine. The point is that nobody can tell that you aren't actually using the same keys to generate new addresses anymore.
- pclmulqdq 9mo agoThis is no different on the outside from making a new account.
- JasonADrury 8mo agoObviously it is, how do you think tools like chainalytics work? Nobody is inspecting an individual address, that's ridiculous.
- MarceliusK 9mo agoWhat investigators often look for isn't just wallet age, but funding patterns, timing, and linkages between wallets
- chazftw 9mo agoThat’s pretty common, you may think you own the data you work on, but you don’t. It’s proprietary confidential.
- re-thc 9mo ago> you may think you own the data you work on, but you don’t It's called <open>AI.
- dgellow 9mo agowhy would you think you own data you work on
- 0xTJ 9mo agoWho would think that? At every corporation where I've worked it's been explicit in both the contract and in HR training that this is explicitly not allowed.
- cjonas 9mo agoInsider 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.
- crazygringo 9mo agoYup. 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-trading-isnt-always-bad 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.
- rfv6723 9mo agoThe 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.
- crazygringo 9mo agoYup. That is the other big exception described in the article.
- deadbabe 9mo agoThere's a feel good story where a parent can't afford a very expensive medical procedure to save a child, so someone tells them to place a massive bet in a prediction market for a certain event that may happen, and then they make it happen, therefore siphoning off money from the other gamblers for a good cause. Just a small way everyday people use the system against itself as a way to survive.
- cjonas 9mo agoSeems pretty naive to think that this type of thing is happening in favor of the "everyday person".
- rapind 9mo agoBad leaders get bad followers.
- helsinkiandrew 9mo agoInterestingly 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-enforcement-cases https://news.kalshi.com/p/kalshi-trading-violation-enforceme... https://x.com/polymarketmoney/status/2001056273500954784?s=46 https://x.com/polymarketmoney/status/2001056273500954784?s=4...
- Analemma_ 9mo agoManifold 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.
- sir0010010 9mo agoThough Manifold only uses their non-withdrawable play currency Mana.
- cc-d 9mo agoThe 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.
- tyre 9mo agoPrediction markets are regulated by the CFTC in the US. Your point stands, for now at least, since the CFTC seems entirely uninterested in prosecuting or regulating.
- cc-d 9mo agoThanks for making me aware of another federal agency :) Seems to me prosecuting or regulating this sort of activity is futile, and pretty much serve only the interests of the mob. These markets make additional data open source, which otherwise might exclusively belong only to mob, so that's pretty cool. We democratized buying airstrikes. It You may know how bad things really are, but if you don't, the lawboys are pretty much just playing pretend at this point, and have been for a while. Mob wants me to add: if you try to buy an airstrike with our very based and functional cryptocurrency systems, you will probably just find mob. We have mob priced in, anybody with a significant amount of cryptocurrency knows this too. It's not as simple as "buy an airstrike" comrade (we are referencing the person writing this post)
- seydor 9mo agoI can't believe these markets are still legal
- morkalork 9mo agoWhy would Washington ban their staffers' bonus program?
- senkora 9mo agoEDIT: 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.
- agency 9mo agoI 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/phamstatement092723 https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstateme...
- deleted 9mo ago[deleted]
- qoez 9mo agoIt is most definitely against the rules of the sites and illegal, especially on kalshi
- deleted 9mo ago[deleted]
- 7777777phil 9mo ago77 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-prediction-markets/ https://philippdubach.com/posts/the-absolute-insider-mess-of...
- throwaway5752 9mo agoPrediction markets exist to bypass gambling restrictions and monetize insider trading. It isn't a problem, it is their raison d'etre.
- gtowey 9mo agoJinx!
- juleiie 9mo agoYeah 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.
- logicchains 9mo ago>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.
- juleiie 9mo agoThe majority of people can’t even control their daily screen time, yet we are supposed to believe they can masterfully restrain their urges when money and dopamine are on the line? Nothing I’ve seen indicates human impulse control is that bulletproof. Furthermore, the 'I have it under control' narrative isn't proof of a healthy habit; it’s practically the universal slogan of active addiction.
- croes 9mo agoPrediction market, either gambling or inside trading.
- Havoc 9mo agoGood. I do hope corporations in general take a harder stance on this. From a society perspective people with inside knowledge fleecing randoms is not a win. We've got that somewhat under control on the stock exchange, but have this absurd situation where on prediction markets it is a free for all and everyone pretends this is fine. I also think corporations should distance themselves from individuals willing to fleece randoms. Trading in general is very wild west survival of the fittest but active exploitation of insider knowledge speak of very poor morale character
- strix_varius 9mo agoHonestly it seems stupid but fine to me. Like if someone random comes up to me on the sidewalk and says hey if OpenAI announces a browser tomorrow, you give me $100. If not I'll give you $1000. Obviously I'm not going to take them up on it, they clearly have inside information. If you're betting on a prediction market without insider information then you're just... The fool who is soon parted from his money one way or another. I generally feel like people should be free to do whatever insane stuff they want with their own lives.
- clcaev 9mo ago> I generally feel like people should be free to do whatever insane stuff they want with their own lives. The problem with people doing insane stuff with their "own money" is the burden they often exact on their family or society. Perhaps the realm of independence starts when loans are reasonable and current, there is sufficient child support, and they are meeting a base savings rate for their retirement. Speaking of which, perhaps any UBI could also use a minimal criteria, reviewed annually but without any barriers on first year eligibility.
- Havoc 9mo ago>Like if someone random comes up to me on the sidewalk and says hey if OpenAI announces Then you hopefully understand that randoms approaching you is no equal to reality.
- MengerSponge 9mo agoWouldn't those prediction markets be more efficient if positions were associated with people's real names? Like, a 100k wager from a finance dude carries some information, but a 10k wager from a staffer says a lot more!
- ddp26 9mo agoPrediction markets are interesting when they are predicting future things nobody knows for sure. "Predicting" private, known information is the wrong use case.
- hephaes7us 9mo agoThis is just one way information goes from being private to being public. It is sensible that people who provide intelligence to the market be compensated, whether they're better at inferring/predicting or whether they just know something we don't. Obviously, in a case like this, an individual would be violating the terms of their employment/non-disclosure agreement. I agree that is bad! I don't think that damns the concept of "predicting known information".
- peterjliu 9mo agoI mentioned a potential OpenAI insider in https://x.com/peterjliu/status/2024901585806225723 https://x.com/peterjliu/status/2024901585806225723, that was from 5 minutes of investigation. There are probably more. And then there's a lot of other companies.
- mrkramer 9mo agoInside trading on the public market and on the public blockchain, that's smart!
- djohnston 9mo agothat's right prole! only Congress has that privilege!
- blindriver 9mo agoI find it absurd that someone can create an unregulated market like Kalshi, and then all of us need to be beholden to it, even though the idea is stupid. How is it possible that someone can create a product that none of us agree on, and now everyone else has to conform to the rules around it because of the problems that it creates. I would rather Kalshi get shut down than the precedent of allowing this to control employees or people.
- MarceliusK 9mo agoMakes you wonder how much "market accuracy" on these platforms is actually just leakage
- rohitpaulk 9mo agoTwo questions I'd have expected the article to answer: (a) how did they identify the employee, and (b) how come they weren't sent to jail
- tabs_or_spaces 8mo agoOpenai employees already get crazy salaries. What motivates someone to do this? I would understand a low salaried person doing this, but not someone from a really high paying org
- _zagj 8mo ago> Openai employees already get crazy salaries. What motivates someone to do this? Given what OpenAI does, what kind of person, and with what moral character, do you think works there? EDIT: AI in general seems to attract bad actors, for whatever reason. Remember Anthony Levandowski or Marvin Minsky?
- blitzar 8mo agoThey bet "no" on AGI this year?
- sharp_runner_84 8mo agoThe real issue here isn't just the insider trading -- it's how thin Kalshi and Polymarket orderbooks are on niche events. You can move the price 10-15 cents on a binary contract with a few thousand dollars. That makes insider trading on these platforms both incredibly easy and incredibly profitable compared to traditional securities markets where you'd need serious capital to materially move the price.