Polymarket has revised its market-integrity rules as concerns mount over manipulation and insider-trading risks in prediction markets. The changes cover both its global decentralized finance platform and its U.S. exchange, which operates under Commodity Futures Trading Commission (CFTC) oversight.
The updated policy introduces stricter market-design standards, clearer resolution criteria for settling outcomes, and more precisely specified data sources. Polymarket said it will also increase monitoring and surveillance to spot suspicious trading patterns and will bar certain market types it views as prone to manipulation or ethically sensitive.
The policy shift follows an incident last week in which the company said it banned and reported users who pressured an Israeli journalist with death threats to alter a news article linked to a $17 million market on an Iranian missile strike.
Prediction markets have grown rapidly, helping Polymarket raise $200 million in July and reportedly pursue a valuation as high as $10 billion. That expansion has drawn regulatory pushback: several U.S. states have taken action against platforms, alleging they operate as unlicensed gambling.
Polymarket’s announcement comes shortly after Major League Baseball signed a deal with the company and the CFTC reached a separate agreement aimed at integrity protections—moves that signal efforts to legitimize prediction markets through partnerships and closer regulatory alignment.
Ethical and fairness concerns persist. Bloomberg reported a case in which a small group of accounts allegedly earned about $1 million by correctly timing bets on potential U.S. strikes on Iran; all six accounts had been newly created in February and had only ever placed wagers on those outcomes, raising questions about possible insider information.
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