OpenAI has terminated an employee after an investigation into their activities on prediction market platforms, particularly Polymarket. In a message to staff, OpenAI’s CEO of Applications, Fidji Simo, highlighted that the employee had used confidential OpenAI information in connection with these external markets.
A spokesperson for OpenAI, Kayla Wood, reiterated that company policies explicitly prohibit employees from leveraging confidential information for personal gain, which includes trading on prediction markets. While the specifics regarding the employee’s identity and their trading activities have not been disclosed, evidence suggests this was not a one-off incident.
Polymarket operates on the Polygon blockchain, where its trading ledger is pseudonymous but can still be traced. Financial data platform Unusual Whales conducted an analysis that raised alarms over clusters of suspicious trading activity related to OpenAI-themed events since March 2023. The platform identified 77 positions across 60 wallet addresses as suspected insider trading, particularly those linked to significant product releases like ChatGPT Browser, GPT-5, and changes around CEO Sam Altman’s status.
In November 2023, mere days after Altman was ousted from OpenAI, a new wallet made a substantial bet on his return, ultimately securing over $16,000 in profits. This account did not engage in any further trading, fueling speculation about potential insider knowledge.
Unusual Whales’ CEO, Matt Saincome, noted that the behavior mirrored typical patterns found in insider trading cases. He explained that the clustering of trades was concerning, particularly when new wallets with no prior trading history appeared en masse leading up to significant product launches, collectively wagering substantial amounts.
The interest in prediction markets has surged in recent years, enabling users to buy contracts on various event outcomes—from sports results to stock prices to geopolitical developments. However, the rapid growth of these platforms has also intensified concerns around the potential for traders to exploit insider information.
Jeff Edelstein, a senior analyst at a betting news site, emphasized the lack of oversight in prediction markets, stating that these conditions can lead to rampant insider trading. In recent developments, Kalshi, another prediction market platform, reported multiple cases of suspicious insider trading to the Commodity Futures Trading Commission, which oversees market regulations. These instances included disciplinary actions against individuals connected to prominent figures, such as a two-year suspension for an employee of YouTuber Mr. Beast and the banning of a political candidate for trading on related events.
While Kalshi has been proactive in addressing insider trading concerns, Polymarket has remained silent and has not responded to inquiries about its practices.
Historically, significant trades on tech markets have led to speculation regarding potential insider activity. A notable case involves a pseudonymous account, referred to as the “Google whale,” which reportedly profited over $1 million from trading on Google-related events, further highlighting the potential for insider knowledge to influence trading outcomes in these evolving markets.
