Key Takeaways
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Polymarket says it is strengthening its systems for identifying insider trading and other suspicious activity ahead of the US midterm elections.
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Nearly $12 million has been traded on whether the CLARITY Act will become law in 2026, although traders currently give it only a 15% chance.
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Rival Kalshi has permanently banned former congressman George Santos over trades linked to his own State of the Union attendance.
Polymarket has pledged to intensify its crackdown on insider trading and other market misconduct as millions of dollars flow into politically sensitive prediction markets.
The company’s new investigations chief said it has surveillance systems capable of identifying abnormal trading ahead of the US midterm elections, when lawmakers expect activity on political contracts to surge.
The assurances arrive as traders wager nearly $12 million on whether the CLARITY Act will become law before the end of 2026.
Polymarket Chief Says Platform Can Detect Suspicious Trades
Polymarket is preparing to disclose more information about the systems it uses to protect the integrity of its markets.
The company’s monitoring operation combines machine learning with blockchain analytics, open-source research and conventional trade surveillance, according to Reuters.
Bautista, a former FBI investigator who joined the company in June, said she was confident Polymarket would provide the resources required to police its platform.
She added that the company already had systems capable of detecting anomalous activity ahead of the midterms.
Polymarket’s international platform does not publicly reveal the identities behind individual accounts.
However, its blockchain system creates a visible record of wallet transactions that investigators can examine.
That information can help the company detect unusual trading patterns or connections between apparently separate accounts.
Bautista told Reuters that Polymarket had referred more than 100 matters to law enforcement.
Among the examples she cited was an account allegedly used by a US soldier to place trades connected to the capture of Venezuelan leader Nicolás Maduro.
Polymarket has faced separate questions over Americans accessing its international service.
The CFTC penalized the company in 2022 for offering event contracts without obtaining the required registration.
The resulting settlement required Polymarket to prevent US customers from using that platform.
It later regained access to the US market by purchasing a federally registered exchange, which operates as the separate Polymarket US business.
