Polymarket Announces New Rules to Fight Insider Trading

(AsiaGameHub) –   Polymarket has revised its rulebook amid growing pressure regarding the integrity of prediction markets. On Monday, the company announced it had implemented Enhanced Market Integrity Rules across both its DeFi platform and its CFTC-regulated U.S. exchange, introducing new restrictions targeting insider trading and market misconduct.

Good to Know

• Polymarket now prohibits trading that relies on stolen confidential data, unlawful tips, or the ability to influence specific events.
• New Market Integrity sections outline the operation of these rules and guide users on how to report suspicious behavior.
• This update follows closely on the heels of Polymarket’s announcement of a sports integrity collaboration with Palantir Technologies and TWG AI.

Polymarket Clarifies Who Is Restricted From Trading Specific Markets

A key component of the update is straightforward: Polymarket is working to clarify which individuals should avoid specific trades. Under the new guidelines, users are forbidden from trading if they possess stolen confidential information related to an event’s result or a connected outcome. Additionally, they cannot trade using illegal tips provided by someone who had a fiduciary duty or obligation of confidence and was not legally permitted to trade on that information themselves.

Polymarket has also introduced a third category of forbidden behavior. Individuals with sufficient authority or influence to impact an event’s outcome are not allowed to trade contracts associated with that event. The company provided a clear example in its public documents: a U.S. Congress member should refrain from trading contracts related to a particular legislative bill.

This is significant because prediction markets have faced criticism over whether politically connected or otherwise well-informed traders can gain an advantage before the general public becomes aware. Recent Associated Press reporting noted that both Polymarket and Kalshi have strengthened their rules as legislators expressed worries about insider information, sensitive geopolitical developments, and public trust in event trading markets.

Neal Kumar, Chief Legal Officer of Polymarket, said:

“Markets thrive on clarity. These rule enhancements make our expectations abundantly clear for every participant across both platforms and highlight the compliance infrastructure we have already built.

“As Polymarket continues to scale, we will build on our foundation with clear communication to Polymarket’s users to ensure our markets do what they do best — surface truth.”

In addition to addressing insider trading, Polymarket stated that both platforms already prohibit fraud, wash trading, spoofing, fake transactions, front-running, self-dealing, attempted market manipulation, and other actions that can disrupt fair and orderly markets. The new Market Integrity pages now detail the practical application of these rules and provide users with dedicated channels to report suspicious activity.

The timing of this update is intentional. As sports and political prediction markets gain increased visibility, Polymarket has been seeking to demonstrate to leagues, regulators, and users that it can more rigorously oversee sensitive contracts. Last week, Major League Baseball revealed a multi-year partnership with Polymarket focused on official data and branding, while also emphasizing the need for integrity protections for baseball-related markets.

Polymarket also recently disclosed a separate collaboration with Palantir Technologies and TWG AI to develop a sports integrity platform—another indication that surveillance and monitoring are becoming core to how prediction exchanges present themselves to the public.