Tomorrow, @zachxbt is announcing the results of a major investigation into insider trading at one of crypto's most profitable businesses. And of course, there's already a Polymarket on which company it'll be...
People are joking that the ultimate insider trade would be for those employees to bet on it.
Turns out… they actually could. Well, the company could!
US prediction markets like Polymarket and Kalshi are regulated by the CFTC as futures exchanges.
And yes — the CFTC does have insider trading rules.
But here's where it gets interesting:
1. In commodities law, insider trading isn't about fairness. It's about theft. An oil trader can't front-run her own company's positions for personal gain. But the company itself can trade on its own proprietary knowledge — production plans, internal data, all of it.
That's not illegal. That's literally what hedging is.
2. Former CFTC Commissioner Caroline Pham put it plainly:
Commodities insider trading is only illegal when it involves misappropriated confidential information — a breach of trust to the source.
3. So, back to the hypothetical:
If a rogue employee bets on the Polymarket before the investigation drops — that's probably insider trading. They're using information that isn't theirs.
But if the company itself bets? It's their information.
Under commodities law… that's likely legal.
