Polymarket has revised its market integrity rules, explicitly barring users from trading event contracts with stolen confidential information, illegal tips, or from positions where they can influence the outcome of the event. The updated standards apply to both its decentralized platform and its U.S. exchange regulated by the Commodity Futures Trading Commission, or CFTC.
The prediction market operator announced the changes on Monday as part of a broader push to curb illegal activity on the platform. Under the new language, users may not trade if they hold information obtained in a way that would breach an existing duty of trust or confidence owed to another person or entity. The rules also prohibit trading on tips passed along by people who would themselves be barred from participating. One more category is now spelled out directly: anyone able to affect the result of an event cannot trade that market.
Three forms of conduct are now defined more clearly
Polymarket said the revisions make its restrictions more explicit. The first banned practice is trading on stolen confidential information. The second is trading on unlawful tips, where the source of the information could not legally trade the contract. The third covers people with the ability to influence an event’s outcome. The platform also reiterated that fraud and market manipulation remain prohibited, including spoofing and wash trading.
Neal Kumar, Polymarket’s chief legal officer, said the rule enhancements make the company’s expectations clear for participants on both platforms and point to the compliance infrastructure it has already built.
Scrutiny grew after trading tied to geopolitical events
The move follows rising criticism of prediction markets. The report said alleged insiders may have profited from confidential information linked to the ongoing conflict involving the U.S., Israel, and Iran. In a November interview on CBS’s 60 Minutes, Polymarket founder and CEO Shayne Coplan said that people having an informational edge in the market was “a good thing” and added that there were “a lot of benefits” to it. That comment drew added attention to how information advantages function on these platforms.
State-level lawmakers and regulators are also moving to tighten oversight of prediction markets. According to the report, Polymarket currently operates under the federal oversight of the CFTC. The new policy does not alter that structure, but it does set out more clearly what the platform considers off-limits in insider trading and market abuse cases.