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OpenAI Fires an Employee for Prediction Market Insider Trading

https://www.wired.com/story/openai-fires-employee-insider-trading-polymarket-kalshi/
52•bookofjoe•2h ago

Comments

xrd•2h ago
A fun aside: this person obviously created a bunch of new Bitcoin accounts to hide their activity.

It makes you think that if you were able to surreptitiously add malicious side channel software into a popular npm package that you wouldn't just need to hunt for crypto wallets with balances.

You could also probably find a market for crypto wallets with small balances or zero balances. The history and date of creation would be the value to some.

This openai employee should have gone on the dark web to buy older addresses to cloak their activity.

It's sad to say that almost all crypto use cases point to fraud. I'm excited about crypto and there is some fascinating research around anonymous transactions (like zcash). But, that real utility is always overshadowed by the actions of charlatans or worse.

0x3f•1h ago
I don't really understand. You can create wallets at will. What would be the value of one that someone else happened to create?
xrd•1h ago
If it has a small transaction history it obscure the owners intentions. An address created right before a wager is obviously for one purpose.
0x3f•1h ago
Right but if you have the forethought to go buy such a wallet, you could just make one yourself in advance and create a transaction history.

Although I would argue that even this doesn't have much value. It's not a big problem that people know "there exists an insider at OpenAI". There are plenty of employees there that shield you from being discovered.

In fact it would be so difficult to find this person among them, assuming the most basic opsec, that I'm highly skeptical they actually fired anyone. I would sooner assume this is just an announcement designed to discourage the behavior, since no specifics are provided.

xrd•52m ago
You are giving a lot of credit to this criminal. I really doubt they thought about this long in advance of the crime. Are you suggesting they got hired at openai so they could make calculated wagers at Kalshi? This was more likely a crime made impulsively.
dontknowbtc•1h ago
> created a bunch of new Bitcoin accounts to hide their activity

tell me you don’t understand crypto without telling me you don’t understand crypto.

chazftw•1h ago
That’s pretty common, you may think you own the data you work on, but you don’t. It’s proprietary confidential.
re-thc•51m ago
> you may think you own the data you work on, but you don’t

It's called <open>AI.

cjonas•1h ago
Insider trading is so trivial on the prediction markets. I'd guess that it's actually the "feature" that results in the outcomes being so accurate.
rapind•1h ago
Bad leaders get bad followers.
helsinkiandrew•1h ago
Interestingly Kalshi has ‘banned’ insider trading, whilst polymarkets often tweets that some of their users must have inside information

https://news.kalshi.com/p/kalshi-trading-violation-enforceme...

https://x.com/polymarketmoney/status/2001056273500954784?s=4...

Analemma_•1h ago
Manifold actually explicitly encourages insider trading, arguing that it leads to more accurate pricing. This was possibly defensible back when it was a cute funtime project run by a Bay Area polycule, but it’s probably going to get them in deep shit sooner or later, even though they don’t even use real-money betting.
sir0010010•54m ago
Though Manifold only uses their non-withdrawable play currency Mana.
cc-d•44m ago
The SEC only exists for dad to frame people.

The vast majority of insider trading schemes are not prosecuted, many leave no evidence trail at all without going deep into black-op classified territory.

seydor•1h ago
I can't believe these markets are still legal
morkalork•41m ago
Why would Washington ban their staffers' bonus program?
senkora•1h ago
> The employee, she said, “used confidential OpenAI information in connection with external prediction markets (e.g. Polymarket).”

Note that “insider trading” is not illegal on prediction markets. The particular issue here is that the employee “disclosed” confidential information on a public forum by influencing the prices assigned to certain outcomes by prediction markets.

agency•58m ago
I don't think this is true, though enforcement is another thing and the standard is different than in securities markets. Prediction markets are regulated by the CFTC and the insider trading standard is “misappropriation of confidential information in breach of a pre-existing duty of trust and confidence to the source of the information” (vs any “material non-public information” for securities) https://www.cftc.gov/PressRoom/SpeechesTestimony/phamstateme...
qoez•54m ago
It is most definitely against the rules of the sites and illegal, especially on kalshi
7777777phil•52m ago
77 suspicious positions across 60 wallets, 13 brand-new accounts appearing 40 hours before the browser launch. First confirmed case of a major tech company firing over prediction market trades.

I wrote about why prediction markets have a structural insider trading problem that nobody's solved yet: https://philippdubach.com/posts/the-absolute-insider-mess-of...

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