Key Highlights
- Polymarket expanded insider trading restrictions across both its DeFi platform and U.S. exchange.
- The updated rules also target spoofing, wash trading, self-dealing, front-running, and other manipulative conduct.
- The company introduced clearer reporting channels and outlined separate surveillance systems for DeFi and U.S. markets.
Predictions market platform Polymarket has updated its market integrity rules across both its DeFi platform and its CFTC-regulated U.S. exchange, broadening restrictions around insider trading, market manipulation, and participant conduct as prediction markets face closer scrutiny.
According to the official announcement, the revised standards are now reflected in the DeFi platform’s terms of use and in the Polymarket US rulebook. The company also published separate market integrity pages explaining how the rules apply on each platform and where users can report suspicious activity.
Insider trading restrictions expanded
A central part of the update is a clearer definition of conduct that Polymarket says is prohibited.
Under the revised rules, participants may not trade on contracts using stolen confidential information tied to the likely outcome of an event if that information was obtained in breach of a duty of trust or confidence. The rules also prohibit trading on illegal tips, where a participant knows or should know the information came from someone who was not allowed to use it.
Polymarket also said users may not trade on contracts if they hold enough authority or influence to affect the outcome of the event itself. This provision applies across both platforms and adds to broader restrictions meant to limit conflicts between market participation and event control.
Manipulation rules cover more than insider conduct
Polymarket said both platforms prohibit spoofing, wash trading, fictitious transactions, self-dealing, front-running, misuse of information, attempted manipulation, and other disruptive practices that could undermine orderly markets.
The company framed the update as a clarification of existing standards, but the broader language gives a more detailed outline of what conduct could trigger reviews or sanctions.
Separate surveillance systems for DeFi and U.S. markets
Polymarket said enforcement will differ depending on the platform. For its DeFi markets, the company said it uses onchain transparency alongside outside surveillance and technology partners to monitor trading activity. Because trades are executed on Polygon, wallet activity and contract positions can be reviewed publicly. If unusual activity is identified, Polymarket said it may investigate, ban wallet addresses, or refer matters to law enforcement.
On its U.S. exchange, the monitoring framework is more structured. Polymarket said it relies on external surveillance partners, a real-time control desk, and a Regulatory Services Agreement with the National Futures Association. According to the company, potential penalties on the U.S. platform can include suspension, termination, monetary sanctions, or regulatory referrals.
New reporting channels added
The company also introduced dedicated reporting channels for suspicious activity. DeFi users can raise concerns through Polymarket’s Discord or its general support email, while U.S. exchange participants can submit confidential reports through a separate reporting address tied to QCEX.
The publication of standalone integrity pages suggests Polymarket is trying to make enforcement standards more explicit as the prediction market sector draws more attention from regulators, lawmakers, and sports leagues.
Rule changes come as pressure on prediction markets builds
The update arrives at a time when prediction markets are facing broader pressure over event-based contracts, insider access, and market oversight. This scrutiny has intensified in recent months as lawmakers and regulators debate whether some politically or militarily sensitive contracts should be restricted more aggressively.
Against this backdrop, Polymarket’s latest rule changes appear aimed at tightening its internal framework across both decentralized and regulated offerings, particularly around trades involving confidential information or participants who may influence outcomes directly.
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