Alt: Arthur Hayes Opposes Insider Trading Restrictions In Prediction Markets, Says ‘Data Deserves To Be Free’ And Prices Should Reflect ‘All Possible Information’
Arthur Hayes, Chief Investment Officer at Maelstrom Fund, weighed in on the insider trading debate in prediction markets, saying people will make better calls when information flows freely.
Hayes Says Excessive Regulations Unnecessary
In a statement shared with Benzinga, Hayes firmly opposed the idea of regulating insider information, endorsing an arguably libertarian viewpoint.
“Data deserves to be free, and market participants can make better decisions if all possible information is reflected in the
price of things,” the BitMex co-founder stated.
In fact, Hayes argued that, apart from theft or fraud, which are already illegal, these markets should remain unregulated.
Alarm Over Insider Trading
Prediction markets have lately come under heightened scrutiny. Precisely timed, large bets, especially those involving U.S. military operations in Iran and Venezuela, have raised red flags.
Last month, a U.S. soldier was charged with allegedly using classified information to profit on a Polymarket bet linked to the capture of Venezuela's ousted leader, Nicolás Maduro.
Lawmakers have taken decisive action on the issue. In April, the Senate unanimously adopted a resolution banning Senators, officers, and staff from engaging in prediction markets. Bipartisan legislation has also been introduced to extend the ban across the entire executive branch.
The Commodity Futures Trading Commission, which oversees prediction markets, has already said that insider trading on platforms like Kalshi and Polymarket is illegal and will be a top enforcement priority.
Is The Law Fair?
Economist Robin Hanson, widely credited with originating the concept of online prediction markets, stated that while some organizations may have “legitimate interest” in keeping secrets, other organizations likewise have legitimate interests in trying to uncover their secrets.
“And I don’t think law should, you know, lean too heavily in either direction,” Hanson told Benzinga.
He compared prediction markets to an “information institution” similar to journalism, arguing that some of the best news stories resulted from reporters persuading people to disclose secrets they had pledged to keep.
Photo Courtesy: Arthur Hayes
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