Insider trading risk is no longer confined to traditional securities, and compliance teams are being pushed to catch up with markets that never sleep. As digital assets, tokenised instruments and prediction markets expand the ways employees can act on confidential information, firms are being urged to rethink what “employee trading” actually covers.
According to StarCompliance, the core principle has not shifted: material non-public information remains sensitive regardless of the asset class used to exploit it.
StarCompliance recently discussed the importance of rethinking insider trading compliance for digital markets.
What has changed is the number of avenues available to monetise that information, spanning brokerage accounts, exchanges, digital wallets and decentralised platforms, often operating across time zones and jurisdictions simultaneously.
For decades, employee trading programmes were built around traditional securities. That foundation still matters, but it may no longer capture the full picture of employee activity. Firms are being encouraged to review whether their policies clearly define which assets, accounts and platforms require disclosure or pre-clearance, without treating every emerging instrument identically.
Restricted lists remain a fundamental control, but they no longer address the full scope of risk. Shadow trading, where an employee profits from an economically related company rather than the one they hold information on, is one example. Tokenised assets present similar challenges, since their economic relationships often sit outside conventional issuer classifications. Prediction markets add a further layer, allowing an employee to take a position on an event without ever trading the underlying security.
Visibility is another growing concern. As employee activity spreads across digital exchanges, blockchain wallets and decentralised venues, traditional monitoring approaches risk leaving blind spots. Compliance teams are being advised to assess whether their current oversight capabilities can keep pace with this fragmentation.
Surveillance itself is also evolving. Rather than simply collecting more transaction data, the emphasis is shifting towards context, linking trading activity to information access, timing and asset relationships to produce better-informed alerts rather than a higher volume of them.
Perhaps the most pressing challenge is designing for risks that have not yet emerged. Many employee compliance programmes were not built with tokenised real-world assets or regulated prediction markets in mind just a few years ago. The recommendation is to build adaptable infrastructure capable of absorbing new asset classes and data sources, rather than reworking policy each time a new product gains traction.
The wider message is that new markets do not remove old risks, they create new routes for them to resurface. The task ahead for compliance teams is not predicting the next asset class, but ensuring their frameworks can flex when it arrives.
Read the full StarCompliance post here.
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