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Polymarket has updated its rulebook as pressure around prediction market integrity keeps building. The company said Monday that it rolled out Enhanced Market Integrity Rules across its DeFi platform and its CFTC-regulated U.S. exchange, with new limits aimed at insider trading and market abuse.
Good to Know
A big part of the update is simple: Polymarket is trying to make clearer who should stay out of certain trades. Under the new framework, users cannot trade if they hold stolen confidential information tied to an event outcome or a related outcome. They also cannot trade on illegal tips passed along by someone who had a duty of trust or confidence and could not legally trade on that information themselves.
Polymarket also added a third lane of prohibited conduct. People with enough authority or influence to affect an outcome cannot trade contracts tied to that event. The company gave a straightforward example in its public materials: a member of Congress should not be trading on a contract linked to a specific legislative proposal.
That matters because prediction markets have drawn heat over whether politically connected or otherwise informed traders can gain an edge before the public catches up. Recent reporting from AP said both Polymarket and Kalshi tightened rules as lawmakers raised concerns about insider knowledge, sensitive geopolitical events, and public confidence 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.”
Beyond insider trading, Polymarket said both platforms already ban fraud, wash trading, spoofing, fictitious transactions, front-running, self-dealing, attempted manipulation, and other conduct that can disrupt orderly markets. New Market Integrity pages now lay out the practical side of those rules and give users dedicated channels for reporting suspicious behavior.
The timing is not random. Polymarket has been trying to show leagues, regulators, and users that it can police sensitive contracts more aggressively as sports and political prediction markets get more attention. Last week, Major League Baseball announced a multi-year partnership with Polymarket tied to official data and branding, while also stressing the need for integrity safeguards around baseball-related markets.
Polymarket also recently announced a separate partnership with Palantir Technologies and TWG AI to build a sports integrity platform, another sign that surveillance and monitoring are becoming central to how prediction exchanges pitch themselves to the public.