OpenAI Terminates Employee Over Confidential Data Misuse in Prediction Markets
OpenAI has terminated an employee following an internal investigation that revealed the individual used confidential company information in connection with prediction market platforms, including Polymarket, according to a report by The Wired. The dismissal was communicated to staff earlier this year in a message from Fidji Simo, CEO of Applications at OpenAI, though the company has not disclosed the employee's name or specific details of the trades involved.
Internal Policies and Employee Conduct
In her message to employees, Fidji Simo stated that the employee "used confidential OpenAI information in connection with external prediction markets (e.g. Polymarket)." OpenAI spokesperson Kayla Wood reinforced this, noting, "Our policies prohibit employees from using confidential OpenAI information for personal gain, including in prediction markets." The company did not provide further information about the investigation or whether other employees are under review, maintaining a focus on upholding strict ethical standards.
Analysis Reveals Suspicious Trading Patterns
An analysis conducted by financial data platform Unusual Whales identified clusters of trading activity around OpenAI-related events since March 2023. Polymarket, which operates on the Polygon blockchain, allows transactions to be traced while users remain pseudonymous. Unusual Whales flagged 77 positions across 60 wallet addresses as suspected insider trades, linked to key events such as:
- Product release dates for Sora, GPT-5, and the ChatGPT Browser
- Employment status changes of OpenAI CEO Sam Altman
For instance, in November 2023, two days after Altman was removed from his role, a new wallet reportedly placed a large bet on his return, later profiting over $16,000 without further trades. Unusual Whales CEO Matt Saincome highlighted the clustering pattern, stating, "In the 40 hours before OpenAI launched its browser, 13 brand-new wallets with zero trading history appeared to collectively bet $309,486 on the right outcome. When you see that many fresh wallets making the same bet at the same time, it raises a real question about whether the secret is getting out."
Growing Concerns Over Prediction Markets
Prediction markets enable users to trade on future events, such as technology launches and corporate decisions, but their rise has sparked increased concerns about potential insider trading. Jeff Edelstein, a senior analyst at InGame, commented, "This prediction market world makes the Wild West look tame in comparison. If there's a market that exists where the answer is known, somebody's going to trade on it." Earlier this week, Kalshi reported several suspected insider trading cases to the Commodity Futures Trading Commission, underscoring the regulatory challenges in this evolving space.
The incident at OpenAI highlights broader issues of data security and ethical conduct in the tech industry, as companies grapple with preventing misuse of sensitive information in increasingly popular digital markets.
