Polymarket has tightened its market-integrity rules as scrutiny intensifies over manipulation and insider-trading risks in prediction markets. In a Monday announcement, the company set out revised rules that apply to its global decentralized finance platform and its U.S. exchange, the latter operating under Commodity Futures Trading Commission (CFTC) oversight.
The updates introduce stricter market-design standards, clearer resolution criteria for settling outcomes, and more specifically defined data sources. Polymarket said it is also boosting monitoring and surveillance to detect suspicious trading activity and will restrict certain market types, including those it deems prone to manipulation or ethically sensitive.
The move follows an incident last week in which Polymarket said it banned and reported users who pressured an Israeli journalist with death threats to change a news article tied to a $17 million market on an Iranian missile strike.
Prediction markets have surged in popularity, drawing a growing trader base and helping Polymarket raise $200 million in July while reportedly pursuing a valuation as high as $10 billion. That growth has prompted regulatory pushback: several U.S. states have taken action against platforms, alleging they amount to unlicensed gambling.
Polymarket’s announcement arrives shortly after Major League Baseball signed a deal with the company, alongside a separate agreement with the CFTC focused on integrity protections — moves that reflect efforts to legitimize prediction markets through partnerships and regulatory alignment.
Ethical concerns remain. Bloomberg reported a case in which a small group of accounts allegedly earned about $1 million by correctly timing bets on U.S. strikes on Iran; all six accounts had been newly created in February and had only ever placed wagers on whether the strikes would occur, raising questions about potential insider information and fairness.
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