TLDR
- Polymarket updated rules on its DeFi platform and CFTC-regulated US exchange.
- The rules ban insider trading, spoofing, wash trading, and outcome manipulation.
- Users cannot trade on stolen confidential information or illegal tips.
- People who can influence event outcomes are barred from trading those contracts.
- Polymarket uses on-chain transparency, surveillance partners, and NFA oversight in the US.
Polymarket has tightened market integrity rules across its DeFi platform and its CFTC-regulated US exchange. The move sets clearer limits on insider trading, spoofing, wash trading, and outcome manipulation.
The company said the changes are now reflected in the DeFi platform’s Terms of Use and the Polymarket US Rulebook. The update also comes with new Market Integrity pages that explain the rules and reporting process.
Clearer limits on insider trading
The updated rules define three forms of insider trading that are not allowed. One rule bars trading on stolen confidential information linked to an event outcome.
Another rule bans trading on illegal tips. This applies when someone receives confidential information from a person who owed a duty of trust or confidence.
Polymarket also said people with enough authority to affect an event outcome cannot trade related contracts. The company said this restriction applies across both platforms.
Neal Kumar, Chief Legal Officer of Polymarket, said, “Markets thrive on clarity.” He added that the rule changes make expectations clear for all participants and reflect compliance systems already in place.
Kumar also said Polymarket plans to keep building on that base as it grows. He said the goal is to help markets continue to surface truth.
Broader ban on manipulation and abusive trading
The updated rules go beyond insider trading. Both platforms also ban fraud and market manipulation in several forms.
These include spoofing, wash trading, fictitious transactions, self-dealing, front-running, and information misuse. The rules also prohibit attempted manipulation and other disruptive conduct that can harm market order.
Polymarket said the new market integrity pages show how these restrictions work in practice. The pages also give users a way to report suspicious activity across the DeFi platform and the US exchange.
The company said the changes are meant to reinforce market quality and user protection. It presented the update as part of a wider compliance framework already operating across its products.
Surveillance systems on DeFi and the US exchange
On its DeFi platform, Polymarket said it uses a multi-layered monitoring system. It also works with surveillance and technology specialists to watch for unusual trading activity.
All trades on the DeFi platform are executed on the Polygon blockchain. Because of that, trading activity is visible on-chain, and contract holders can also be viewed on polymarket.com.
When unusual or questionable activity is detected, Polymarket may review the conduct and take action. The company said penalties can include wallet bans and referrals to law enforcement.
On Polymarket US, surveillance works at three levels. The exchange uses outside surveillance specialists, a real-time control desk, and a Regulatory Services Agreement with the National Futures Association.
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