Polymarket hires Chainalysis to detect on-chain insider trading

Polymarket has hired blockchain analytics firm Chainalysis to deploy an on-chain detection model that monitors trading activity and enforces the platform’s Market Integrity Rules across its prediction markets. The system uses Chainalysis Data Solutions to examine trades, positions and settlements recorded on Polymarket’s public ledger for patterns that suggest use of non-public information.

Under the agreement, Chainalysis will provide investigative tools, threat prevention capabilities and professional services to install the detection model and train Polymarket’s staff. The model is calibrated to identify anomalous trading behavior in real time and is layered on top of the platform’s existing surveillance systems so alerts appear as activity is recorded on-chain.

Polymarket CEO Shayne Coplan framed the arrangement around the platform’s transparency-first design, saying, “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.” A Polymarket press release stated the deployment 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.”

Polymarket updated its Market Integrity Rules in March to specify three prohibited categories of insider trading conduct. The Chainalysis deployment follows increased scrutiny of prediction markets from both the crypto community and policymakers. Authorities recently charged a U.S. Army soldier with allegedly using confidential government information to profit from bets tied to the reported capture of Venezuelan leader Nicolás Maduro; the defendant pleaded not guilty. The U.S. Senate also approved a resolution barring sitting senators from trading on prediction markets.

Polymarket and Chainalysis said the public, on-chain record of trades allows live anomaly detection and supports investigations when suspicious patterns emerge. Chainalysis will assist Polymarket’s compliance and investigative teams in interpreting alerts and pursuing enforcement under the platform’s rules.

Rival platforms have adjusted controls and monitoring as prediction markets draw larger stakes and attention. Polymarket stated the new system is intended to help identify and respond to suspected insider trading using blockchain records to support any subsequent investigations or enforcement actions.