Can insider betting become a big problem for crypto prediction markets?

[Ishicryptic]

Insider information is indeed a very big problem for prediction markets. In some countries, the governments are already putting bans and restrictions on prediction markets. Ofcourse we know that one of the reasons for such restrictions is that some confidential information are being leaked through the prediction markets. Prediction markets like Polymarket and Kalshi have their services restricted in some countries. The prediction markets, if they can, should sort out means to regulate the spread of insider information. If possible, they should  report persons suspected of selling insider information.

Insider trading is already a big problem in the prediction market and if nothing is done about it by the prediction sites and different governments it would soon ridicule the prediction market industry, people won't take predictions seriously knowing that somebody or a group of people already have inside information about what is to be traded on. I believe that the best that some governments could do so far in their regions is banning prediction market services because of the obvious riggings, ofcourse we cannot overlook regulation matters regarding taxations too that can also affect their bans. If prediction sites can seriously push for prosecution of traders on their sites with strong suspicions about insider trading that can help to curb the cheating which can begin to restore genuine traders confidence in their sites.

[Nwada001]

Blockchain contains the transaction details but it can be tied to nobody if the one placed the bet under someone else so these are hard to investigate and to be honest they will always exists but it will not affect the entire prediction market because the market is so big and the platform also keep increasing their strength to protect themselves from the insider jobs all the time.

It will only make it easier to track if the wallet used the funding from a centralized exchange where the player has been KYCed or the money later landed in a centralized exchange as the op also listed. Aside from that, the chances of those with inside information taking advantage of the market getting caught are on the low side; that’s why most of them will always escape and have been escaping.

[Awaklara]

Someone with insider information can be a problem for any market, not just prediction markets. I think manipulation is easier in prediction markets, and perhaps that's why authorities are cracking down on them and even banning them in certain countries. I think it's important to have clear rules for the health of this market; as long as there aren't any, uncertainty prevails.

Maybe more specific to the rules on markets opened on prediction market platforms. We know that opened markets allow for manipulation. We can look at markets which, in my opinion, do not need to be wagered on, like political issues.
Wouldn't this also be like match-fixing in sports betting? There are certain people who play for their own gain and mess up many other bets. Of course, people like that can create problems.

[Pandorak]

Of course, we’ve seen this happen many times, it’s not just a one or two time occurrence. After all, there will always be people who want to take advantage of the situation using inside information, solely for personal gain, thinking this is a moment or opportunity that might never come again (free money), who would turn that down. For those of us who simply place bets relying on whatever information is available, and perhaps supplemented by instinct or luck, this is undoubtedly very unfair. Although it’s difficult, measures or rules must be put in place going forward to minimize the likelihood of this happening again.

[Cryptohygenic]

So I see this as one problem prediction markets could face because of insider information. Normally we bet because it is a prediction game, but what if someone already knows the outcome because of their job or position?

The moment you even acknowledge of knowing the events outcome with the fact that you are an insider signifies cheating to the terms of the prediction market.
Where the prediction market is meant to be an unpredictable gaming or event, it is expected that bettors would always make their decisions of the outcome with uncertainty but were someone has already known the outcome mean you have already secured an advantageous position before the house.
Maybe the right question should be that what if an insider does not know the outcome but still made it successful in predicting the outcome of the event? I guess no one in the position that truly knows the outcome will even agree of knowing the outcome earlier before they made their bet because if you do, you will be indicting yourself for cheating.

[uneng]

Of course, we’ve seen this happen many times, it’s not just a one or two time occurrence. After all, there will always be people who want to take advantage of the situation using inside information, solely for personal gain, thinking this is a moment or opportunity that might never come again (free money), who would turn that down. For those of us who simply place bets relying on whatever information is available, and perhaps supplemented by instinct or luck, this is undoubtedly very unfair. Although it’s difficult, measures or rules must be put in place going forward to minimize the likelihood of this happening again.

It's already a big problem which discourage average gamblers from engaging in such bets because they will be always in disadvantage. In my opinion, gamblers have to be really naive or reckless to try predicting outcomes of global events while expecting potential returns from it, because they will never have access to the informations few individuals have on the backgrounds. It's even worse than playing against the house edge of the casino.

[Doan9269]

Since the majority of gamblers don't treat prediction markets as part of gambling, I don't think it should be something that will affect crypto prediction gambling and not market this time around, because I'm not focusing on talking about prediction markets but gambling as a whole.

If you think you have the nerve to go for prediction markets and wouldn't mind any of the insider influence being involved in what you are doing, that could be a good idea if you only forget about the process and focus on what you are after, because looking towards the fact that prediction market could be internally motivated and influenced, you may not have the courage to even go for it in the first place than your normal gambling you please bet upon.

[9ja Amaka]

So I see this as one problem prediction markets could face because of insider information. Normally we bet because it is a prediction game, but what if someone already knows the outcome because of their job or position?

This seems to be a common occurrence, A common case, judging from the several examples shared by other members regarding the insider betting happening in Polymarket. There has not been a general solution for prediction markets to stop insider trading.

I assume the prediction market is cool with everything that is going on currently. Despite the complaints from governmental bodies and private entities, the prediction market have fold their hands in combating insider trading. Another case, another day to remain silent because nothing will be done.

[Junii]

I read this news about a U.S. servicemember who is being investigated after allegedly making more than $1 million on Polymarket. He was betting on military events where he may have information that was not public yet, so basically this looks like an insider job.

Luck factor works in gambling and now this the clear example. He is a service member but if any human being has that opportunity he/she will not miss it because greed is available in every human being. He is not alone who did this from the last few years we are seeing trump administration has insider information and they make a filthy money through it whether it is in crypto market or in a poly market as well. I am not in favor of this i am just saying that it’s like putting a cat in charge of guarding the meat and then excepting complete honesty.

[Bryan jessy]

I read this news about a U.S. servicemember who is being investigated after allegedly making more than $1 million on Polymarket. He was betting on military events where he may have information that was not public yet, so basically this looks like an insider job.

Luck factor works in gambling and now this the clear example. He is a service member but if any human being has that opportunity he/she will not miss it because greed is available in every human being. He is not alone who did this from the last few years we are seeing trump administration has insider information and they make a filthy money through it whether it is in crypto market or in a poly market as well. I am not in favor of this i am just saying that it’s like putting a cat in charge of guarding the meat and then excepting complete honesty.

He is a human and the bitter truth is; anyone who is in a position where he can get good inside information that can gives him a good sum of money, trust me it only takes self control to resist that temptation of not taking advantage of the information, if a person is greedy he will never resist it. But on the other hand what if this guy just got lucky why experimenting because everyone believes that he took advantage of the information he already had what if it's not truth, this is what people in certain position or place suffers because they can not be or do things like others, as all eyes are on them watching their every move.

[Mrbluntzy]

Even as bets can publicly be tracked on the blockchain, it’s still not enough for those insider traders who are using privileged information to make money off the market. Only a few of them are being caught, while the majority of them are still escaping; they are hiding their trace even more this period.
The more the exposure of some people being caught, the harder it will be for the next person to get exposed; it’s someone who made the mistake of leaving some trace back to his life through the wallet that they can trace back.

You are right Orpichukwu, now that the problem is already hot and some of them are being caught, what they will be doing now, which is what most of them have already been doing, is to start placing their bets on proxy using the proprietary information they have obtained and by betting on proxy, it will won't be very easy to catch most of them. Most of those inside traders that has not been caught have already been betting on proxy just to avoid being caught.

[Floxynice]

Insider information is indeed a very big problem for prediction markets. In some countries, the governments are already putting bans and restrictions on prediction markets. Ofcourse we know that one of the reasons for such restrictions is that some confidential information are being leaked through the prediction markets. Prediction markets like Polymarket and Kalshi have their services restricted in some countries. The prediction markets, if they can, should sort out means to regulate the spread of insider information. If possible, they should  report persons suspected of selling insider information.

Insider trading is already a big problem in the prediction market and if nothing is done about it by the prediction sites and different governments it would soon ridicule the prediction market industry, people won't take predictions seriously knowing that somebody or a group of people already have inside information about what is to be traded on. I believe that the best that some governments could do so far in their regions is banning prediction market services because of the obvious riggings, ofcourse we cannot overlook regulation matters regarding taxations too that can also affect their bans. If prediction sites can seriously push for prosecution of traders on their sites with strong suspicions about insider trading that can help to curb the cheating which can begin to restore genuine traders confidence in their sites.

I do not see it that people will no longer take prediction markets seriously because of insider information. Infact, these people which you are concerned about will wish that they have access to such information that will make them win. People will do anything to make money, so prediction markets won't face much problem from that angle. Where they should be concerned is on the side of the government restricting the operations of these prediction markets because some countries have started it already. That is why the prediction markets too must do their own part in making sure that people do not use their platform to carryout such illegal practices all because of money.

[Fortify]

I read this news about a U.S. servicemember who is being investigated after allegedly making more than $1 million on Polymarket. He was betting on military events where he may have information that was not public yet, so basically this looks like an insider job. There is also a KPMG employee being investigated for a similar case.

So I see this as one problem prediction markets could face because of insider information. Normally we bet because it is a prediction game, but what if someone already knows the outcome because of their job or position?

But the funny thing is, everything is on the blockchain. So if there are suspicious betting activities, they can still be traced more easily. In this case, blockchain transparency can actually be very helpful.

If America had an effective leader in government right now then these so-called "prediction markets" which are just a variation of normal sports betting markets, would have been clamped down on many months if not years ago. Unfortunately they have an incompetent leader that is spending more time golfing, picking unnecessary fights and filling his own pockets rather than bringing the country together or solving real problems. The fact he has a family member heavily invested in Polymarket means that the Justice Department (which Trump has filled with his cronies) has no impartiality or credibility to do anything, but will chase any rival companies doing other things. This will continue until he's dislodged and hopefully thrown in jail, because nobody in the pathetic Republican party will stand up to this parasite. You know there will be a crackdown a few months after it happens and quarterly filings showed that they cashed out of the business.

[I_Anime]

That's why I'm less interested in betting on Polymarket, because people who do not have access to A1 information and rely solely on information on the internet for free are ultimately dependent on luck. I mean, predictions around politics and economics can be easy for those who actually interact directly with the government environment, political parties, pollsters, or certain media.

That’s accurate and the reason why I never touch prediction market ever since it was started.

It’s like giving your money to an inside trader in case you bet against them and what’s worst is this option usually the odds is very high which means regular gambler will not take it considering the possibility that it will happened in reality.

Better to stick on sports and don’t feed those inside traders with money.

By doing the normal casino price prediction contest I could already tell is not for me . Then when I gave it a try , predicting the market in the prediction thread I’ve never even come close to being a winner. Now imagine going into betting in the crypto prediction with my hard earn money always being at stake.

To be honest is actually bad , while others are fully depending on luck someone else is cheating the system. Funny how they won’t see it as them cheating they will see it as grabbing opportunity. But they are literally milking folks hard earn money , is better to stick with something that’s more fair like you said sport betting .

[Moreno233]

Insider trading is not just going to become a problem in prediction market, it is already a big problem. This year alone we have seen many cases of insider trading and a number of investigations in that respect. The temptation for insider trading is huge because it is not everyone that will resist the urge of using such information to enrich themselves. It is even possible that some of them use these information without knowing it is wrong. Insider betting or trading is going to continue plaguing prediction market.

[red4slash]

I read this news about a U.S. servicemember who is being investigated after allegedly making more than $1 million on Polymarket. He was betting on military events where he may have information that was not public yet, so basically this looks like an insider job. There is also a KPMG employee being investigated for a similar case.

So I see this as one problem prediction markets could face because of insider information. Normally we bet because it is a prediction game, but what if someone already knows the outcome because of their job or position?

But the funny thing is, everything is on the blockchain. So if there are suspicious betting activities, they can still be traced more easily. In this case, blockchain transparency can actually be very helpful.

There are still those who do this for politicians and even for some workers in big companies when we know there are rules that they are prohibited from playing for things that are sensitive or when they already have more information about something including political issues.

This examination will be quite relevant because from the beginning the rules have been enforced and when imposing this then it becomes illegal for them.  But on the one hand this also still shows that in the end the prediction market will still be easy to be inserted by things like this so that even though later this will be viewed differently (as a prediction or gambling market) but the situation will remain the same where they must be aware that there will always be more use of information by some who we will call "unscrupulous" even though there are prohibitive regulations.

[taufik123]

Since polymarket became a boom and many users have used Polymarket as a betting venue in any form, even everything has become a bet that I have never even thought about before.
Bets that have been predicted before by insiders like this are no longer a new practice, but quite a lot of people have taken advantage of it.
Regarding such examples of Military events, there is certainly a thorough investigation if insiders are related and using their personal accounts or those who are not good at hiding their traces.

These kinds of practices that insiders use can be a big problem, but not for the whole of crypto prediction platforms,
because it's about the utilization of their position and is not related to manipulation of crypto predictions.

Now all events are at stake and since Polymarket is quite crowded, many other platforms are starting to do so as well.

[bhadz]

There will be more restrictions soon with these called decentralized prediction markets. And that's to avoid more of these manipulations and insiders. Firsthand information is unfair to all other bettors in the same market because they are there to make money and already knew what will happen. The punishment that will be given to them should be strict because they deserve it. It's a big problem and if platforms like polymarket will not act on it to avoid further abuse through insider, the demand will decrease per se.

[Cantsay]

There are a lot of ways to still get away even if you're on the blockchain. The fact that there is more transparency on the blockchain doesn't automatically make it completely safe.

There would still be a lot of people who would still go to a crypto prediction market, and still use their information that they have that others doesn't and still make tons of money from it, and still be able to go scott-free without being caught.

[famososMuertos]

::///::

The story about the US military officer is old news. Now, unless you have inside information, what I do know is that his profits didn't even reach half a million, and it was the blockchain itself that exposed him. So, if he had done things right, they probably wouldn't have even noticed. Although, that's the point: many of the bets placed are investigated, and the results themselves undergo a scraping process for review.

It's a latent problem with traditional investments, so in a way, it's an old, well-known issue, but "what you problem?" the prediction markets continue to grow.