ESMA flags insider trading and retail risks in prediction markets
The European Securities and Markets Authority (ESMA) has warned of insider trading, market manipulation, and retail investor protection risks associated with prediction markets. In its latest TRV Risk Monitor, the EU regulator said these risks can be particularly difficult to detect on DLT-based platforms, where pseudonymous participation and multiple accounts can complicate the identification of abusive activity.
Prediction markets have gained limited traction in the EU compared with the USA, ESMA said, partly because rules on binary options prevent the marketing, distribution, and sale of certain event contracts to retail investors. Depending on their characteristics, prediction market contracts can fall within the EU financial regulatory framework, including MiFID II and MiCA, while some activities may also be subject to national gambling rules.
ESMA cited several recent incidents to illustrate these risks, including newly created wallets that generated $1.2 million in profits shortly before the February 2026 strike on Iran, and a US Army master sergeant charged over profits from bets on the capture of Venezuelan President Nicolás Maduro. It also referred to suspected tampering with weather sensors used to settle prediction market contracts, which led Météo-France to file a police complaint.
The regulator also identified risks linked to unclear contract outcomes, unreliable or manipulated information used for settlement, and unequal access to information between retail and sophisticated participants. It noted that prediction markets are increasingly connected with crypto-assets, decentralised finance, AI, and social media, while platform responses to suspected abuse are often reactive.
ESMA said the regulatory framework can address such risks only where the relevant contracts fall within the scope of financial regulation.
Why does it matter?
Prediction markets sit at an increasingly important intersection between financial markets, digital platforms, and the real-time information economy. Their treatment could help shape how policymakers distinguish between financial innovation, gambling, and other forms of event-based trading as these markets become more technologically sophisticated. The issue also raises a wider question for regulators: how can existing frameworks keep pace with new forms of market participation without creating gaps where emerging risks are difficult to address?
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⏰16:00-17:30 EAT / 14:00–15:30 CET
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Related actors:
Related people: Daniel Erik Schaer, Katherine Getao, Patrick Maluki, Mwende Njiraini, Jovan Kurbalija
Technology Innovations for Creative Diplomacy
⏰16:00-17:30 EAT / 14:00–15:30 CET
Background and Rationale
Diplomacy is being rapidly reshaped by technological innovation. Digital platforms, artificial intelligence, data analytics, and immersive technologies are transforming how governments, international organisations, and non-state actors communicate, negotiate, and influence global audiences. These tools are expanding the reach and speed of diplomatic engagement while creating opportunities for more inclusive and creative approaches to international cooperation.
At the same time, global challenges such as climate change, conflict, misinformation, and digital inequality demand more agile and innovative diplomatic responses. Technology-enabled creative diplomacy offers new ways to build trust, shape narratives, engage foreign publics, and strengthen multilateral action. This webinar will explore how emerging technologies can be strategically applied in diplomacy while addressing ethical, security, and governance concerns.
Objectives
The webinar seeks to examine the impact of technological innovation on diplomatic practice, showcase creative applications of digital tools in public diplomacy and international engagement, and share practical experiences from technology-driven initiatives. It also aims to foster dialogue among key stakeholders on opportunities, risks, and capacity needs in digital and creative diplomacy.
Format and Expected Outcomes
The virtual webinar will feature a moderated expert panel followed by an interactive Q&A session. Participants will gain a clearer understanding of how technology can enhance creative diplomacy, access practical insights applicable to their work, build networks across diplomacy and technology communities, and contribute to policy-relevant discussions on responsible digital innovation.
Conclusion
The Technology Innovations for Creative Diplomacy webinar will provide a timely platform to reflect on the future of diplomacy in the digital age, encouraging innovative, inclusive, and forward-looking approaches to international engagement.
Technology Innovations for Creative Diplomacy
⏰16:00-17:30 EAT / 14:00–15:30 CET
Background and Rationale
Diplomacy is being rapidly reshaped by technological innovation. Digital platforms, artificial intelligence, data analytics, and immersive technologies are transforming how governments, international organisations, and non-state actors communicate, negotiate, and influence global audiences. These tools are expanding the reach and speed of diplomatic engagement while creating opportunities for more inclusive and creative approaches to international cooperation.
At the same time, global challenges such as climate change, conflict, misinformation, and digital inequality demand more agile and innovative diplomatic responses. Technology-enabled creative diplomacy offers new ways to build trust, shape narratives, engage foreign publics, and strengthen multilateral action. This webinar will explore how emerging technologies can be strategically applied in diplomacy while addressing ethical, security, and governance concerns.
Objectives
The webinar seeks to examine the impact of technological innovation on diplomatic practice, showcase creative applications of digital tools in public diplomacy and international engagement, and share practical experiences from technology-driven initiatives. It also aims to foster dialogue among key stakeholders on opportunities, risks, and capacity needs in digital and creative diplomacy.
Format and Expected Outcomes
The virtual webinar will feature a moderated expert panel followed by an interactive Q&A session. Participants will gain a clearer understanding of how technology can enhance creative diplomacy, access practical insights applicable to their work, build networks across diplomacy and technology communities, and contribute to policy-relevant discussions on responsible digital innovation.
Conclusion
The Technology Innovations for Creative Diplomacy webinar will provide a timely platform to reflect on the future of diplomacy in the digital age, encouraging innovative, inclusive, and forward-looking approaches to international engagement.
Related actors:
Related people: Daniel Erik Schaer, Katherine Getao, Patrick Maluki, Mwende Njiraini, Jovan Kurbalija