Polymarket published updated market integrity rules across both its global DeFi platform and its CFTC-regulated U.S. exchange on Monday, codifying explicit bans on insider trading, market manipulation, and outcome-influencing conduct.
The announcement arrives four days after the platform signed an exclusive MLB partnership that required embedding integrity controls into its U.S. rulebook, and amid a broader regulatory offensive against the prediction market sector.
The updated rules cover three specific forms of prohibited insider trading: trading on stolen confidential information, trading on illegal tips from someone who owed a duty of confidence to a third party, and trading by anyone who holds sufficient authority to affect the outcome of an event.
The latter category has been a recurring concern: suspected insider trading was observed across Polymarket markets tied to U.S. military action in Venezuela, Iran operations, and OpenAI corporate decisions.
What the Enforcement Framework Covers
Both platforms now explicitly prohibit spoofing, wash trading, fictitious transactions, self-dealing, and front-running.
Polymarket US operates a three-tier surveillance structure: a trade surveillance technology partner, a real-time control desk, and a Regulatory Services Agreement with the National Futures Association (NFA).
Violations can result in suspension, monetary penalties, or law enforcement referral.
The DeFi platform relies on on-chain transparency - all Polygon-based trades are publicly viewable - supplemented by internal surveillance and wallet-level enforcement, including banning addresses and referring cases to authorities.
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The Regulatory Backdrop
Polymarket re-entered the U.S. market in late 2025 after acquiring QCEX, a CFTC-licensed derivatives exchange, for $112 million. It received an Amended Order of Designation from the CFTC in November 2025.
The company is valued at approximately $9 billion following a $2 billion investment from Intercontinental Exchange in October 2025. However, state regulators in Nevada, Tennessee, Massachusetts, and others continue to contest federal jurisdiction, arguing the platform's contracts constitute unlicensed sports gambling.
The week before Monday's announcement, Portugal banned the platform, Arizona filed 20 criminal misdemeanor charges against rival Kalshi, and the DEATH BETS Act was introduced in Congress.
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