BlockBeats message, March 31, citing CNN and multiple sources, reported that federal prosecutors in Manhattan, the United States, are investigating whether certain question-and-answer trades that generated substantial profits on prediction markets may violate insider trading and other laws.
According to people familiar with the matter, the head of the Securities and Commodities Fraud Division of the U.S. Attorney’s Office for the Southern District of New York recently met with representatives of Polymarket to discuss how to apply existing laws to potentially improper conduct in this rapidly evolving industry.
The U.S. Department of Justice is putting its focus on those attention-grabbing, high-profit trades, signaling an escalation in regulatory scrutiny of the industry. Over the past year, the prediction markets industry has expanded rapidly in a context of relatively limited federal regulation.
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