New Markets, Familiar Risks: Rethinking Employee Compliance
4 Key Insights for Navigating Prediction Markets, Digital Assets, and Tokenization
Prediction markets, tokenized securities, and digital assets are expanding the ways employees can invest, creating new challenges for compliance teams. But while the markets may be changing, many of the underlying conduct risks are familiar.
That was the focus of our recent StarCompliance webinar, New Markets, Same Risk: Compliance Challenges in Digital and Prediction Markets, part of our 2026 Global Compliance Benchmark Study webinar series.
The webinar series builds on findings from Star’s inaugural Benchmark Study, highlighting rapid AI adoption, emerging market risks, and growing pressure to modernize compliance programs. Download the full study [HERE].
I had the pleasure of hosting the discussion alongside Ian McGinley, Partner at Sidley Austin and former Director of Enforcement at the U.S. 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 focused on tokenized assets.
Together, we explored what these evolving markets mean for personal account dealing and how compliance teams can adapt.
Here are four key insights from the conversation:
1. New Markets, Familiar Conduct Risks
Prediction markets may be relatively new, but the risks they create are not. Recent enforcement activity has highlighted how employees may use sensitive or non-public information to trade on event contracts, creating many of the same concerns firms already manage across traditional securities.
The challenge is that conventional personal account dealing programs may not capture this activity. If policies and surveillance are focused primarily on securities and brokerage accounts, prediction market activity could fall outside existing controls.
Key Takeaway: New products can create new avenues for familiar employee conduct risks. Firms should consider whether existing controls address the behavior they want to prevent, regardless of the type of asset or platform involved.
2. Policies Need to Keep Pace
Many codes of ethics and personal trading policies were written around established concepts such as reportable securities and securities accounts. Prediction markets, digital assets, and other emerging products may not fit neatly within those definitions.
Rather than trying to anticipate every new product, firms can consider the underlying activity and determine when similar requirements around disclosure, pre-clearance, or restrictions should apply.
Key Takeaway: Policies should be flexible enough to accommodate markets that continue to evolve. Focusing on the underlying risk can help firms avoid having to rewrite their frameworks every time a new product emerges.
3. Tokenization Is Blurring Traditional Boundaries
Digital assets are no longer just about cryptocurrencies such as Bitcoin and Ethereum. Traditional financial instruments are increasingly being represented on blockchain networks, bringing familiar assets into new trading environments.
For compliance teams, that means understanding not only what employees are trading but where and how they are trading it. Account disclosure, pre-clearance, and surveillance may need to extend across traditional and blockchain-based platforms.
Key Takeaway: The infrastructure surrounding an investment may change without changing the underlying compliance risk. Controls need to account for employee activity across an increasingly connected mix of traditional and digital markets.
4. Build for the Risk, Not Just the Product
With new products and platforms emerging quickly, creating rules for every possible scenario is unlikely to be sustainable.
A more scalable approach combines clear policies, employee education, appropriate pre-clearance requirements, and surveillance capable of identifying relevant activity across markets. This can help firms respond to emerging risks without continually rebuilding their compliance programs.
Key Takeaway: Compliance teams cannot predict every product that will emerge next, but they can build frameworks designed to adapt. Clear policies and connected surveillance can provide a stronger foundation as markets continue to change.
Preparing for What Comes Next
Prediction markets, tokenization, and digital assets may be changing how employees invest, but the core compliance objectives remain the same: identify conflicts, protect sensitive information, and appropriately oversee employee activity.
The opportunity now is to ensure the controls built for traditional markets are ready for what comes next.
To learn how Star can help your organization enhance Prediction Market Monitoring, strengthen oversight of emerging asset classes, and build a more connected compliance program, click [HERE] to connect with Star today.
Watch the Webinar on Demand
Want to hear the full discussion? Watch New Markets, Same Risk: Compliance Challenges in Digital and Prediction Markets on demand for more on how firms can adapt employee compliance programs to an evolving investment landscape.
Watch on demand [HERE].
Be Part of the Series Finale
The last webinar in this series Information Barriers Under Pressure: MNPI Governance in a Connected World, examines how firms are modernizing information barriers, control room operations, surveillance, and MNPI oversight as organizations and data become increasingly interconnected.
October 22 | 11:00 AM EST | 4:00 PM BST
Register today [HERE] for the remaining webinar and join us as we continue to unpack what the Benchmark Study findings mean for compliance teams in practice.
