It is not certain that every trade on US politics funded from a US-based crypto exchange is done by a US-based trader, but it is certain that some of them are (because those people keep getting arrested for insider trading!). As a legal matter, Polymarket is not allowed to take bets from US customers on its main exchange; as a practical matter, it is.
Are these facts related? I mean:
–If your Polymarket trading is illegal anyway, might you also be tempted to illegally insider trade on Polymarket?
–If there’s never any enforcement against Polymarket for letting US customers trade illegally, might you assume that there won’t be much enforcement against customers who insider trade?
–Might you assume that, if Polymarket is letting you trade illegally, it will be hesitant to report any insider trading, since it’s technically not allowed to take your bets anyway?
That’s not any sort of advice, don’t insider trade, but the general regulatory stance of giggling at illegal Polymarket trading probably does encourage some illegal Polymarket insider trading.
Source: Polymarket – Bloomberg