Polymarket probes midterm bets for insider trading
6.7 Regulation Polymarket investigated midterm election bets for insider trading, referring two cases to the CFTC. A new surveillance system analyzes user data and issues hundreds of alerts daily.
Polymarket has investigated dozens of bets related to the U.S. midterm elections for suspected insider trading and market manipulation. At least two cases have been referred to the Commodity Futures Trading Commission (CFTC). Led by Shana Bautista and a 16-person team, the investigations leverage a new surveillance system that analyzes data from social media, campaign finance records, cryptocurrency companies, banking partners, and statistical models. This system generates hundreds of alerts daily. The surveillance covers both Polymarket’s U.S. platform, which requires identity verification, and its international market, where users can trade anonymously with cryptocurrencies. Investigations intensified after reports that political campaign staffers profited from unreleased poll results. Polymarket has also partnered with Chainalysis to enhance detection of suspicious trading activity. The platform’s House-control market neared $24 million in trading volume, drawing increased regulatory scrutiny over the legality and compliance of political betting markets.
