Polymarket Partners With Chainalysis to Combat Insider Trading

Polymarket has enlisted blockchain data firm Chainalysis to help police insider trading and “all types of fraud and market manipulation” as the prediction market seeks to raise $400 million and gain approval to relaunch in the U.S., according to a statement from Thursday. The company stated that the deal includes using Chainalysis’ “investigative tools to produce blockchain-verified evidence for proactive and reactive engagement with law enforcement and regulatory inquiries.”

Funding and Regulatory Context

The move to better police the platform comes as Polymarket, which calls itself the world’s largest prediction market, seeks to raise $400 million at a $15 billion valuation, according to a report from The Information. Polymarket is also pushing to reenter the U.S. market pending approval from the Commodity Futures Trading Commission.

Polymarket previously settled with the CFTC in 2022 for allegedly offering illicit binary options contracts. The prediction market then launched a U.S. version of its platform after acquiring derivatives exchange QCEX last year, a platform regulated by the CFTC.

Platform Transparency and Integrity

Polymarket founder and CEO Shayne Coplan said Thursday: “Polymarket was built on-chain because transparency matters, and our platform shows what markets can look like when trades are open, traceable, and accountable by design. This partnership with Chainalysis pairs that transparency with the monitoring and enforcement infrastructure to back it up, and helps us continue to build the most trusted source of truth in markets.”

The company stated: “This sends a clear signal: insider trading, in addition to all types of fraud and market manipulation, is not welcome on Polymarket, and those who attempt it will be identified.”

Recent Insider Trading Incidents

Last week, the Department of Justice arrested an active-duty U.S. Army soldier for allegedly using confidential information to place bets on Polymarket ahead of former Venezuelan President Nicolás Maduro’s capture earlier this year.

Meanwhile, both Polymarket and Kalshi have attempted to address concerns about insider trading on the platforms as both companies aggressively pursue multi-billion dollar valuations and market dominance. Trading volumes on both exchanges have been growing as consumers embrace opportunities to wager on the outcomes of a wide variety of events, including sports, politics, economics, pop culture, and even the weather.

Academic Research on Market Participants

Separately, an academic paper analyzing every Polymarket transaction from 2023 through 2025 concluded that the platform’s accuracy reflects “the wisdom of an informed minority, not the wisdom of the crowd.” According to the study, 3.14% of accounts qualified as “skilled winners,” meaning their order flow consistently predicted both short-term price moves and final outcomes. Together with market makers, this informed minority captured more than 30% of all gains while making up under 3.5% of accounts.