Polymarket Taps Chainalysis for Insider Trading Monitoring Amid $15B Valuation Push

Polymarket has enlisted blockchain data firm Chainalysis to help police insider trading and fraud on its platform as the prediction market seeks to raise $400 million at a $15 billion valuation and gain approval to relaunch in the U.S., according to a statement from Thursday. The company said the partnership includes using Chainalysis’ investigative tools to produce blockchain-verified evidence for engagement with law enforcement and regulatory inquiries.

“This sends a clear signal: insider trading, in addition to all types of fraud and market manipulation, is not welcome on Polymarket, and those who attempt it will be identified,” the company said in its announcement.

Background: CFTC History and U.S. Reentry Efforts

Polymarket previously settled with the Commodity Futures Trading Commission in 2022 for allegedly offering illicit binary options contracts. The prediction market then launched a U.S. version of its platform after acquiring derivatives exchange QCEX last year, a platform regulated by the CFTC. Polymarket is now pushing to reenter the broader U.S. market pending CFTC approval.

Partnership Rationale

Polymarket founder and CEO Shayne Coplan said Thursday: “Polymarket was built on-chain because transparency matters, and our platform shows what markets can look like when trades are open, traceable, and accountable by design. This partnership with Chainalysis pairs that transparency with the monitoring and enforcement infrastructure to back it up, and helps us continue to build the most trusted source of truth in markets.”

Recent Insider Trading Concerns

The move to strengthen compliance comes amid heightened scrutiny of insider trading activity. Last week, the Department of Justice arrested an active-duty U.S. Army soldier for allegedly using confidential information to place bets on Polymarket ahead of former Venezuelan President Nicolás Maduro’s capture earlier this year.

Separately, an academic paper analyzing every Polymarket transaction from 2023 through 2025 concluded that the platform’s accuracy reflects “the wisdom of an informed minority, not the wisdom of the crowd.” According to the study, 3.14% of accounts qualified as “skilled winners,” meaning their order flow consistently predicted both short-term price moves and final outcomes. Together with market makers, this informed minority captured more than 30% of all gains while making up under 3.5% of accounts.

Market Growth

Both Polymarket and competitor Kalshi have attempted to address insider trading concerns as both companies pursue multi-billion dollar valuations and market dominance. Trading volumes on both exchanges have been growing as consumers embrace opportunities to wager on outcomes of events including sports, politics, economics, pop culture, and weather.