Wall Street banks are clamping down on employee trading on forecasting market platforms over concerns they could utilize nonpublic information to place contracts on events.
Goldman Sachs has reportedly banned its employees from contracting on bank-specific events, including financial markets, macroeconomic events, elections and geopolitics, CNBC reportedciting people familiar with the matter.
Unidentified Morgan Stanley sources also told CNBC that the bank has a policy against employees trading in the forecast market, while a Bank of America spokesman said the bank is in the process of issuing modern measures prohibiting employees from trading in the forecast market.
The report deepens concerns about insider trading in prediction markets, which have attracted the attention of the White House and U.S. lawmakers, who have proposed legislation aimed at curbing trading in political forecasts by government officials.
Cointelegraph asked Goldman Sachs what prompted the introduction of the preventive policy. A bank spokesman declined to comment.
In May, the U.S. Department of Justice and the Commodity Futures Trading Commission (CFTC) reported that Google software engineer Michele Spagnuolo made $1.2 million on Polymarket after gaining access to nonpublic information at work.
On June 18, Wisconsin state representative Bryan Steil introduced legislation prohibiting certain public officials from “placing bets on public policy issues and political outcomes,” but did not name any White House officials.
One major flashpoint occurred in January when a soldier allegedly bet more than $400,000 betting on the ouster of Venezuelan President Nicolás Maduro, who was overthrown and captured by U.S. forces.
Related: Suspected insider wallets raked in $1.2M in bets following Axiom ZachXBT exposé
Polymarket is pushing for wider access in the US
Meanwhile, Polymarket is trying to get regulatory approval to offer U.S. users margin trading, which would allow them to bet on events with less upfront capital.
According to a July 3 report, the prediction market has applied to become a futures commission trader through its affiliate Coming Home GBA LLC. filing with the National Futures Association (NFA).
The filing is Polymarket’s latest attempt to expand its U.S. footprint and attract more users. Cointelegraph has reached out to Polymarket for comment on this matter. The platform also needs authorization from the CFTC to allow users to trade without full security.
Chief rival Polymarket has already received approval from U.S. regulators to trade on margin after its affiliate, Kinetic Markets LLC, received an NFA authorization in March.
Coming Home GBA LLC, filing. Source: nfa.futures.org
According to Dune, Polymarket achieved a record daily audience volume of $713 million on June 20 data. The breakthrough moment occurred more than a week after the start of the World Championships on June 11.
In June, Kalshi also reported record monthly trading volume of nearly $9.4 billion as the 2026 FIFA World Cup spurred activity in forecasting markets.
Warehouse: The battle in the forecast market is getting closer to the Supreme Court
