[ameliaquining]

The question of what does and doesn't constitute illegal insider trading turns out to be surprisingly subtle, and can vary depending on the type of market. Prediction markets in the U.S. are legally treated as commodities, not as securities like stocks, and insider trading rules for commodities are in some ways less strict. (There are good policy reasons for this; you want to let, e.g., farmers hedge their exposure to the market prices of the stuff they grow, this being the principal reason why we have futures markets, and presumably they have inside information about how their crops are doing.)

Specifically, the CFTC's rules say that it's illegal to "misappropriate confidential information in breach of a pre-existing duty of trust and confidence to the source of the information" by using that information to inform your commodity trades. The MrBeast editor likely did that, but the gubernatorial candidate didn't (he didn't promise anyone that he'd keep his candidacy secret), so if it were just up to government regulators and not platform rules, he'd be in the clear.

Matt Levine writes about this a lot (and is both funny and astonishingly good at explaining the workings of financial capitalism to laypeople); most recently he did so about this particular case: https://www.bloomberg.com/opinion/newsletters/2026-02-25/kal...

[verdverm]

Do you think prediction markets need regulation to reclassify them away from commodities likeness?

[ameliaquining]

I don't have any better ideas for what they should be classified as. They certainly aren't securities.