Polymarket has tightened the reins on market abuse across both its DeFi app and its CFTC‑regulated U.S. exchange, rolling out clearer insider‑trading and market‑manipulation rules, beefed‑up surveillance and formal whistleblower channels.
Why it matters
As prediction markets grow into a mainstream source of real‑time information for media, sports leagues and financial firms, platforms that can prove credible oversight stand to capture the most valuable order flow. Polymarket’s update aims to draw a firm line between its intermediated, regulated venue and the DeFi‑only alternatives that prioritize low cost and self‑custody.
What’s new
- Three explicit insider‑trading prohibitions: trading on stolen confidential information; trading on illegal or “tainted” tips; and trading by anyone who holds sufficient authority or influence to affect an event’s outcome.
- A blanket ban on a wide range of manipulative conduct, including spoofing, wash trading, fictitious transactions, front‑running, self‑dealing, information misuse, attempted manipulation and other practices that distort orderly markets.
- Clear reporting channels and enforcement procedures that apply across the DeFi app and the U.S. exchange.
Enforcement architecture
On the CFTC‑regulated exchange, Polymarket says enforcement will rest on a multi‑layered surveillance stack: partnerships with trade‑surveillance and technology specialists, a control desk conducting real‑time monitoring, and a Regulatory Services Agreement with the National Futures Association (NFA) to investigate and pursue sanctions. Potential penalties include suspension, termination, monetary fines or referrals to regulators and law enforcement.
On the DeFi side, users can report suspected abuse via Polymarket’s Discord or by emailing [email protected]. Participants on the U.S. exchange can submit confidential complaints to [email protected].
Regulatory backdrop and business stakes
The integrity overhaul arrives amid a broader U.S. regulatory pivot: the Commodity Futures Trading Commission (CFTC) has asserted exclusive jurisdiction over prediction‑market derivatives and is shaping how event contracts fall under the Commodity Exchange Act. Polymarket secured an amended CFTC order in late 2025 that allows intermediated access through futures commission merchants and binds the platform to Designated Contract Market‑style surveillance, reporting and self‑regulatory obligations.
Market activity is surging alongside that regulatory clarity. In February 2026, combined monthly volume on major prediction‑market platforms Kalshi and Polymarket hit about $18.6 billion—a record—with more than $8 billion traded in the first half of March alone. Observers say that as event markets become institutional‑grade information sources, exchanges that demonstrate credible surveillance and transparent integrity rules will win the most sensitive flow.
Polymarket’s leadership framed the move as part of that push for clarity. “Markets thrive on clarity,” said Neal Kumar, Polymarket’s chief legal officer, as the company published the new rules. Founder Shayne Coplan has similarly described the effort as a way to let fans engage with sports while ensuring markets grow responsibly and globally.
Bottom line
Polymarket’s tighter rules and enhanced oversight signal a bet on regulated, transparent infrastructure as prediction markets scale. For users and institutional participants, the changes offer clearer guardrails and formal avenues to report and address suspected wrongdoing—key steps as the sector attracts bigger volume and more regulatory attention.
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