Polymarket Investigates Dozens of Midterm Bets — SkimNews
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- Polymarket has investigated “dozens” of bets on its midterm-election markets for possible insider trading and manipulation; at least two investigations have been referred to the CFTC, according to a person familiar with the probes cited by NPR.
- Shana Bautista, Polymarket’s head of global intelligence and investigations, said her 16-person team is policing election bets with a new system that pulls data from social media, FEC filings, crypto companies, banking partners and statistical models, flags users who trip enough internal red flags and produces “hundreds of alerts a day” ahead of the November 3 vote.
- Polymarket monitors both its U.S.-regulated, identity-verified exchange and the anonymously traded Polymarket International; Shana Bautista said crypto trades are rarely fully anonymous and that no case her team has worked has lacked potentially identifiable users.
- Kalshi, Polymarket’s main rival, launched an FEC-based system in May and added employment disclosures and risk scoring for high-risk markets in June; it says it opened more than 150 investigations that year and referred more than 20 cases to law enforcement, though a campaign staffer told NPR they found a way around its block.
- CFTC has done little to police prediction markets, largely leaving the work to companies; in September it warned that “mention markets” should be presumed readily susceptible to manipulation, three weeks after fining a teleprompter operator who traded on speeches already read.
- Polymarket partnered with Chainalysis in April, days after an active-duty U.S. Army soldier was charged with using classified information about the raid to capture Nicolás Maduro to bet on Polymarket; the soldier, who pleaded not guilty, allegedly placed more than $33,000 in bets and won nearly $410,000. Polymarket said it detected the activity and reported it before the arrest.
- Jeff Le Riche, a former CFTC trial lawyer, said trades based on unreleased polls “could potentially be a violation” of the law; campaign staffers told NPR they had made “thousands” of bets on their own candidates using such tips.
Why it matters: Polymarket and Kalshi have converged on company-run surveillance: Polymarket’s 16-person team generates hundreds of alerts daily, and at least two of its cases have gone to the CFTC, while Kalshi reports 150-plus investigations. With CFTC policing limited, campaign staffers and traders face platform compliance systems as the main enforcement layer for prohibited trades.
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