Polymarket is investigating dozens of bets on midterm election markets due to concerns over potential insider trading and market manipulation. Shana Bautista, the company's head of global intelligence and investigations, confirmed that at least two cases have been referred to the Commodity Futures Trading Commission.
The platform utilizes a new surveillance system that aggregates data from campaign finance, banking, crypto transactions, social media, and Federal Election Commission filings. This system generates hundreds of alerts daily, allowing a 16-person investigation team to identify suspicious patterns, such as concentrated trading activity and shared device IDs.
Polymarket operates two distinct platforms: a US-regulated version requiring identity verification and an international platform allowing anonymous crypto trading. Investigators analyze US accounts by matching names to donor lists, while international activity is tracked through on-chain wallet records.
The company has a history of regulatory cooperation, having previously referred over 100 cases to law enforcement. As of mid-October, the total open interest in election-related markets across Polymarket and its competitor Kalshi exceeded $250 million.
