Prediction markets, tokenised securities and digital assets are opening new ways for employees to invest, and compliance teams risk falling behind. The products may be new, but the conduct risks they create are ones firms already know well.
This was the central theme of a recent StarCompliance webinar, New Markets, Same Risk: Compliance Challenges in Digital and Prediction Markets. The session forms part of the company’s 2026 Global Compliance Benchmark Study webinar series, which builds on findings from its first Benchmark Study.
That research pointed to rapid AI adoption, emerging market risks and mounting pressure on firms to modernise their compliance programmes.
The panel featured Sidley Austin partner Ian McGinley, formerly director of enforcement at the US Commodity Futures Trading Commission (CFTC), Kate Dellolio of a16z, who supports the firm’s crypto vertical, and Bryan Choe of RWA.XYZ, a data analytics platform specialising in tokenised assets.
The first concern raised was that prediction markets bring familiar dangers in an unfamiliar wrapper. Recent enforcement action has shown how employees could use sensitive or non-public information to trade event contracts. However, personal account dealing programmes built around securities and brokerage accounts may not capture this activity at all, leaving it outside existing controls. Firms should therefore ask whether their controls target the behaviour they want to stop, whatever the asset or platform.
The second issue was policy drift. Many codes of ethics and personal trading rules were drafted around concepts such as reportable securities and securities accounts. Prediction markets and digital assets do not always fit those definitions. Instead of trying to anticipate every new product, firms can look at the underlying activity and decide when disclosure, pre-clearance or restrictions should apply. This risk-led approach avoids rewriting frameworks each time a new product appears.
Third, tokenisation is eroding the line between traditional and digital finance. Digital assets now extend well beyond Bitcoin and Ethereum, with conventional instruments increasingly represented on blockchain networks. Compliance teams need to understand not just what staff are trading, but where and how. Account disclosure, pre-clearance and surveillance may have to stretch across both traditional and blockchain-based venues, because the underlying risk stays the same even when the infrastructure changes.
Finally, the panel argued that firms should build for risk rather than for individual products. Writing rules for every scenario is not sustainable given the pace of innovation. A more scalable model combines clear policies, employee education, suitable pre-clearance requirements and surveillance able to detect relevant activity across markets.
The core objectives of compliance remain unchanged: identifying conflicts, protecting sensitive information and properly overseeing employee activity. The task now is making sure controls designed for traditional markets are ready for what comes next.
Read the full StarCompliance post here.
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