OpenAI just fired an employee for crossing a line that's becoming increasingly blurry in Big Tech: using insider knowledge to trade on prediction markets like Polymarket and Kalshi. The termination, first reported by Wired, marks one of the first known cases of a major AI company taking action against what amounts to a new breed of insider trading - one that exists in a regulatory grey zone where traditional securities laws don't clearly apply.
OpenAI just set a precedent that could reshape how the tech industry handles a thorny new ethics problem. The company terminated an employee for placing trades on prediction markets using insider information - a move that's technically legal but ethically radioactive.
The employee made bets on platforms like Polymarket and Kalshi, which have exploded in popularity over the past two years. These platforms let users wager real money on everything from election outcomes to product launches, and they've become serious business. Polymarket alone processed over $3 billion in trading volume last year, while Kalshi became the first CFTC-regulated prediction market in the US.
But here's where it gets complicated. Unlike traditional stock trading, where insider trading is clearly illegal under securities law, prediction markets exist in a regulatory twilight zone. The SEC doesn't classify these platforms as securities exchanges, and the CFTC's oversight is limited. That means someone with advance knowledge of, say, an upcoming product launch could theoretically bet on it without breaking federal law.
OpenAI clearly isn't waiting for regulators to catch up. The company's decision to fire the employee signals that it's treating prediction market trades based on insider knowledge the same way it would treat illegal stock trades - as a fireable offense that violates trust and corporate ethics policies. Sources familiar with the matter suggest the termination came after an internal investigation revealed the employee had access to nonpublic information about company developments and used that knowledge to place winning bets.
