Polymarket has implemented changes to wipe out different forms of insider trading after coming under fire for certain markets and outcomes.
The exchange announced its “Enhanced Market Integrity Rules” on Monday, designed to maintain the integrity of its markets and customer protection.
Key Takeaways
- Polymarket now has Market Integrity pages to help users understand the new standards.
- Insider trading was already banned at the platform.
- Six Polymarket users recently won close to $1 million for predicting the U.S. would attack Iran by Feb. 28.
Polymarket’s new update introduced bans to different groups of individuals based on the information and power they hold.
Today we're publishing new market integrity rules across our CFTC-regulated US exchange & DeFi platform — making clear what's prohibited, how we enforce rules, & how to report suspicious activity.
— Polymarket (@Polymarket) March 23, 2026
The World's Largest Prediction Market runs on transparencyhttps://t.co/dWr23zcki6
First, trading is no longer allowed for individuals in possession of stolen confidential information. More explicitly, users cannot buy or sell contracts if they possess sensitive information about the outcome or related outcomes, if wielding that information would “violate a preexisting duty or obligation of trust or confidence owed to another person or entity.”
Users also cannot trade on illegal tips. In other words, they cannot use information they received from another individual if they knew that person could not use the same information to legally trade themselves.
Finally, trading is now prohibited in certain markets for individuals who can influence the outcome of the event. For example, a member of Congress cannot purchase contracts related to the outcome of a specific legislative proposal.
"Markets thrive on clarity," said Neal Kumar, Chief Legal Officer of Polymarket. "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."
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Fighting insider trading
Prediction markets are still relatively new to the masses. To help understand how Polymarket’s new standards will positively affect its platform, it launched Market Integrity pages that both explain the practical applications of the rules and provide resources for users who wish to report suspicious activity.
Polymarket already banned all forms of fraud, market manipulation, and practices that undercut standard operating procedures for markets.
The platform also earlier this month signed a deal with firms including Palantir Technologies Inc. to help crack down on its controversial sports event contracts.
Polymarket’s top prediction rival, Kalshi, also introduced upgraded protocols to combat insider trading last month. CEO Tarek Mansour said that its approach to dealing with the issue was the same as the one taken by the stock market and was split into three pillars: “detect, investigate, enforce.” The Commodity Futures Trading Commission (CFTC), the federal body in charge of regulating prediction markets, also issued new guidance for preventing insider trading on prediction markets in February.
Several prominent individuals have lobbied for insider trading to be normalized, since it brings private information to the light. However, Mansour did not agree, stating that it decreases the possibility of having an even playing field for all traders.
Warts and scandals
Polymarket’s anti-insider trading upgrades come after the platform was rocked by several controversial occurrences.
Six accounts profited close to $1 million by predicting that the U.S. would launch an attack on Iran by Feb. 28. One account also claimed close to $400,000 after predicting that the U.S. would capture Venezuelan President Nicolas Maduro, prompting a strong outcry from lawmakers.
The platform also recently removed markets involving the possibility of a nuclear attack after a viral post prompted outrage over the offering.
