Goldman Sachs, Morgan Stanley Restrict Staff Prediction Market Bets
Major Wall Street banks are cracking down on employee trades on platforms like Polymarket and Kalshi amid rising insider trading concerns.
Goldman Sachs and Morgan Stanley are among the Wall Street giants moving to restrict employees from trading on prediction markets, according to Cointelegraph, as fears of insider trading ripple through platforms including Polymarket and Kalshi. The crackdown signals a new frontier in financial compliance as event-based betting markets grow in mainstream prominence and attract sophisticated participants with access to sensitive information.
The concern driving these policies is straightforward: employees at major financial institutions routinely handle material non-public information — from merger talks to macroeconomic data — that could theoretically give them an unfair edge when wagering on related political or economic outcomes in prediction markets. Regulators and compliance officers are increasingly treating these platforms not as casual speculation tools but as venues where traditional securities-law principles may apply.
Read more EU Finds Meta in Breach of Digital Laws Over Addictive Designs →
Prediction markets like Polymarket, which operates on blockchain infrastructure, and Kalshi, a federally regulated exchange, have surged in visibility following high-profile political cycles and real-time event trading. Their growing liquidity and user base have drawn both retail and institutional interest, making the insider-risk question impossible for large banks to ignore any longer.
The tightening of internal rules reflects a broader reckoning on Wall Street about where the boundaries of existing compliance frameworks end and where new guidance must begin. While no specific enforcement actions were cited, the preemptive restrictions suggest banks are not waiting for regulators to act first — a posture consistent with how firms have historically handled emerging asset classes from crypto to structured derivatives.
The move underscores how quickly prediction markets have evolved from niche curiosities into compliance headaches for the world's most heavily regulated financial institutions. Continue reading at Cointelegraph.
