Polymarket Reviews Builders Program Amid Concerns Over Copy Trading Apps and Insider-Like Behavior

Huo Xing Cai Jing reports that on April 15, the prediction market Polymarket initiated a review of third-party startups in its Builders Program. Launched in November last year, the program enables external developers to build trading applications on Polymarket’s infrastructure; approximately 200 developers have joined, eligible for up to $2.5 million in funding and weekly rewards. The issue lies in the fact that several top-volume developers in the program are all doing the same thing: creating copy-trading applications. These apps aggregate trading accounts with unusually high win rates or flag suspicious timing and abnormal transaction amounts, allowing users to replicate those trades with a single click. Kreo’s selling point is helping users “find insider traders before anyone else,” while Polycool openly displays on its website a guide titled “Polymarket Insider Trading Guide,” stating, “This isn’t the stock market—using non-public information to place bets won’t land you in jail; the rules of decentralized prediction markets are entirely different.” Trading volume generated by the Builders Program surged from $100 million in November last year to over $600 million in March this year, accounting for 16% of Polymarket’s total monthly volume. The founder of the copy-trading app PolyGun recently claimed that at one point, its weekly trading volume reached 11% of Polymarket’s entire platform. However, security vulnerabilities have emerged: in February, PolyGun was hacked via a code vulnerability, resulting in the theft of approximately $70,000 in user funds; another copy-trading app, Polycule, was previously compromised for around $230,000. Most copy-trading apps are operated by anonymous teams and can only be contacted via Telegram. All three executives listed in PolyGun’s press release use pseudonyms, and the operation is largely managed by a single individual. Concerns over insider trading extend beyond copy-trading. On April 7, four user accounts profited $663,000 by betting on a ceasefire between the U.S. and Iran. Chain analysis firm Lookonchain discovered that all four accounts were created and funded on the same day with no prior transaction history. Last month, Polymarket partnered with data analytics company Palantir to enhance compliance monitoring for sports betting and updated its rules to prohibit trades based on “stolen confidential information.” However, Polymarket does not require user identity verification, and many traders use VPNs to obscure their locations and frequently switch accounts—making enforcement significantly more difficult than at competitors like Kalshi, which mandates identity verification. Polymarket’s trading volume reached approximately $23 billion in March, a tenfold increase compared to the same period last year. The platform is currently raising funds at a $20 billion valuation, up from $9 billion in October. Kalshi completed its funding round last month at a $22 billion valuation. Both platforms are facing scrutiny from legislators in multiple U.S. states, who argue that prediction markets effectively function as illegal gambling services circumventing state laws.