4 ms·

I don't understand why it is a crime under current US law. Prediction markets can only do sports gambling (the vast majority of their volume) because they self

by tyre 6mo ago

I don't understand why it is a crime under current US law. Prediction markets can only do sports gambling (the vast majority of their volume) because they self-certify under the CFTC. The CFTC doesn't have the same standards of "insider trading" as the stock market, because insider trading is the entire point of business at the CFTC! If you're trading, like, oil futures or wheat futures or whatever, you are likely doing so specifically because you have inside information about your business needs or production that you want to hedge. I understand why people are mad about gambling versus someone who has insider information, but under current US law I'm not sure that there is a case to be made.

mcmcmc 6mo ago
> Prediction markets can only do sports gambling (the vast majority of their volume) because they self-certify under the CFTC Sports betting is still illegal in 11 states. They can only do what they’re doing because of legislation and enforcement lag. > The CFTC doesn't have the same standards of "insider trading" as the stock market, because insider trading is the entire point of business at the CFTC! True to some extent, but it’s still illegal to use non-public information gained from your firm to trade on personal accounts.
JumpCrisscross 6mo ago
> If you're trading, like, oil futures or wheat futures or whatever, you are likely doing so specifically because you have inside information about your business needs Insider trading, in the U.S., is not legally about fairness but about theft. A firm hedging its own positions is using its information for its own purposes. A federal employee trading on what they heard is abusing the trust placed in them by the American people.
- ikeboy 6mo ago
  Note that the 2nd circuit tossed an insider trading case on government information on the basis that it doesn't count as "property". See United States v. Blaszczak. It may be abuse of trust but that's not automatically a crime.
  - kasey_junk 6mo ago
    Or it maybe a crime but not insider trading.

by tyre 6mo ago

mcmcmc 6mo ago

> Prediction markets can only do sports gambling (the vast majority of their volume) because they self-certify under the CFTC Sports betting is still illegal in 11 states. They can only do what they’re doing because of legislation and enforcement lag. > The CFTC doesn't have the same standards of "insider trading" as the stock market, because insider trading is the entire point of business at the CFTC! True to some extent, but it’s still illegal to use non-public information gained from your firm to trade on personal accounts.

JumpCrisscross 6mo ago

> If you're trading, like, oil futures or wheat futures or whatever, you are likely doing so specifically because you have inside information about your business needs Insider trading, in the U.S., is not legally about fairness but about theft. A firm hedging its own positions is using its information for its own purposes. A federal employee trading on what they heard is abusing the trust placed in them by the American people.

ikeboy 6mo ago
Note that the 2nd circuit tossed an insider trading case on government information on the basis that it doesn't count as "property". See United States v. Blaszczak. It may be abuse of trust but that's not automatically a crime.
- kasey_junk 6mo ago
  Or it maybe a crime but not insider trading.