OpenAI has terminated an employee following an internal investigation into the misuse of confidential company information to place trades on prediction market platforms. Polymarket was mentioned in the report.
Fidji Simo, CEO of Applications, didn't condone the act. In an internal memo, he stated that the company has a zero-tolerance policy for those who take advantage of insider activity for personal financial gain.
Insider Trading Allegations Rock the AI Sector
As WIRED reported, OpenAI spokesperson Kayla Wood said that the company's policy strictly prohibits employees from using non-public information in external financial markets. Although the company has not revealed the employee's identity or specific trade details, blockchain transparency has intensified scrutiny. Because Polymarket operates on the Polygon network, wallet transactions are publicly traceable, despite the use of pseudonymous identities.
Analysts observed coordinated trading activity ahead of major announcements, including product launches such as Sora, GPT-5, and the ChatGPT Browser, along with leadership developments involving CEO Sam Altman.
Suspicious Wallet Activity and Coordinated Bets
The same report from WIRED said that a financial analytics firm, Unusual Whales, identified 77 suspicious positions across 60 wallet addresses tied to OpenAI-related events.
One notable case emerged after Altman's temporary removal in November 2023, when a newly created wallet placed significant wagers on his return. The account reportedly generated more than $16,000 before becoming inactive.
Additional analysis revealed 13 newly formed wallets placing over $309,000 in coordinated trades hours before OpenAI unveiled its browser product. These clustering behaviors mirror classic insider trading patterns commonly investigated in traditional financial markets.
Regulatory Scrutiny Intensifies For Prediction Markets
As decentralized betting platforms expand, regulatory oversight is tightening. Kalshi recently reported suspicious trading activity to the Commodity Futures Trading Commission and strengthened compliance protocols.
According to Decrypt, the involved individual was a MrBeast employee who was not only suspended but also fined more than $20,000 for manipulating prediction markets on YouTube.
Originally published on Tech Times
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