Polymarket Tightens Market Integrity Rules Across DeFi and US Platforms

Polymarket has taken significant steps to enhance market integrity by updating its rules on insider trading and manipulation across its DeFi platform and CFTC-regulated US exchange.

The updated framework defines three specific categories of prohibited insider trading activity, including trading on stolen confidential information, illegally obtained tips, and insider trading by individuals with positions of influence over an outcome.

Additionally, the rules explicitly prohibit a range of manipulative behaviors such as spoofing, wash trading, front-running, self-dealing, fictitious transactions, and attempts to disrupt orderly market activity.

To enforce these new rules, Polymarket has introduced a multi-layered surveillance system that includes blockchain transparency, third-party surveillance tools, internal monitoring systems, and partnerships with surveillance providers. On the DeFi side, enforcement actions may include wallet bans, internal investigations, or referrals to law enforcement. For its US exchange, Polymarket operates a more structured compliance system, including real-time monitoring via a control desk and Regulatory Services Agreement with the National Futures Association (NFA).

The rule update follows earlier scrutiny of suspicious trading activity on the platform, highlighting ongoing integrity challenges in prediction markets.