Goldman Sachs, Morgan Stanley Restrict Staff Prediction Market Trades
Major Wall Street banks are curbing employee access to prediction markets amid growing fears of insider trading on platforms like Polymarket and Kalshi.
Goldman Sachs and Morgan Stanley are among Wall Street's biggest names now imposing tighter restrictions on employees trading in prediction markets, according to a Cointelegraph report, as regulators and compliance officers grow increasingly alarmed over the potential for insider information to leak into venues like Polymarket and Kalshi.
The crackdown reflects a broader anxiety rippling through financial institutions: bank employees routinely handle non-public information about deals, economic data, and corporate events — precisely the kind of intelligence that could give a prediction market trader an unlawful edge. Compliance teams appear to be treating these platforms with the same seriousness once reserved for equity and options trading restrictions.
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Polymarket and Kalshi have surged in visibility over the past year, drawing mainstream attention by allowing users to bet on outcomes ranging from election results to Federal Reserve interest rate decisions. That growth has put them squarely in the crosshairs of Wall Street's legal and compliance departments, which must now evaluate whether existing insider trading frameworks apply to these newer wagering instruments.
The move signals a meaningful shift in how legacy financial institutions perceive decentralized and regulated prediction platforms — no longer fringe novelties but credible markets capable of being manipulated by those with privileged access to information. Whether federal regulators at the SEC or CFTC will formalize new guidance around prediction market conduct for financial professionals remains an open question, but internal bank policies are clearly moving ahead of any official rulemaking.
Continue reading at Cointelegraph.
