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Prediction markets are immature: insider trading, fragmentation, thin participation according to PANews, investor nic carter argues prediction markets remain immature, citing insider trading risks, fragmentation across venues, and a lack of natural buyers and sellers. These structural issues can distort prices and limit the usefulness of event contracts. Insider trading in prediction markets typically concerns material nonpublic information about policy decisions, corporate actions, or election processes. When such information is traded, price discovery may improve temporarily but fairness and confidence can degrade. Fragmentation arises because platforms list overlapping questions with different wording, rules, and settlement criteria. These semantic differences make contracts non-fungible, complicate arbitrage, and can leave identical real-world events priced differently. Thin participation compounds the problem. Without a balanced mix of informed traders, liquidity providers, and hedgers, spreads widen and adverse selection increases, deterring new entrants and compressing market depth. Why insider trading in prediction markets, fragmentation, and compliance matter Insider trading in prediction markets intersects with familiar market-abuse concepts like MNPI, surveillance, and conflicts of interest. The enforcement lens is tightening, and compliance expectations increasingly resemble those of regulated exchanges. Regulatory posture is also turning more explicit. After stressing that traditional fraud standards still apply, Jay Clayton, U.S. Attorney for the Southern District of New York, said: “Prediction markets cannot hide behind the ‘prediction market’ label to escape fraud or insider information laws.” Academic evidence suggests fragmentation has measurable pricing effects. Based on an arXiv study by Jonas Gebele and Florian Matthes, overlapping markets on different platforms exhibited persistent 2–4% price divergences, reflecting semantic non-fungibility and arbitrage frictions. Practically, these dynamics hamper trust and usability. If users fear counterparties with informational advantages, or cannot rely on harmonized contract definitions, participation and liquidity may fall, raising execution costs. BingX: a trusted exchange delivering real advantages for traders at every…

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Filed under: News - @ February 22, 2026 7:26 pm