Polymarket has selected Chainalysis to deploy what it describes as a "first-of-its-kind" on-chain market integrity solution to monitor trading activity and enforce platform rules, the companies said in a press release on Thursday.
At the center of the deal is a detection model built on Chainalysis Data Solutions and designed to surface patterns consistent with insider knowledge in prediction markets. The agreement also spans Chainalysis investigative tools to produce blockchain-verified evidence for engagement with law enforcement, on-chain security capabilities for threat prevention, and professional services to deploy the system and train Polymarket's team.
The framework will sit on top of Polymarket's existing multi-layered monitoring system and is intended to evolve as new trading patterns emerge.
"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," said Shayne Coplan, founder and CEO of Polymarket. "This partnership with Chainalysis pairs that transparency with the monitoring and enforcement infrastructure to back it up."
Insider Trading Scrutiny
The deal lands as prediction markets face intensifying scrutiny over whether traders with non-public information can quietly profit off major events.
Earlier this month, the U.S. Department of Justice charged an active-duty Army soldier with using classified intelligence tied to a military operation involving Nicolás Maduro to place bets on Polymarket, generating roughly $409,881 in profits from about $33,000 in wagers, according to prosecutors. The case is one of the first criminal prosecutions tied to insider activity on a decentralized prediction venue.
The Chainalysis partnership also follows a rule update last month that prohibited trades based on stolen confidential information and illegal tips, as well as wagers by people in a position to influence an event's outcome. It builds on the platform's earlier surveillance tie-up with Palantir and comes as the company pursues a reported $15 billion valuation.
The framing also marks a shift in tone for Coplan, who has previously argued that trading on private information could be socially useful by surfacing data to the public more quickly.
"On Polymarket all trades and all settlements are recorded on a blockchain, a level of transparency that traditional markets simply cannot match," said Jonathan Levin, co-founder and CEO of Chainalysis. "Pairing that transparency with Chainalysis' data and expertise sets a new standard for market integrity enforcement."
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.