Polymarket, the prediction market platform, has announced updated market integrity rules designed to bring its operations closer to regulatory standards. The changes apply to both its global decentralized finance platform and its US exchange, which operates under the compliance oversight of the Commodity Futures Trading Commission (CFTC). The announcement was made on Monday and follows increasing scrutiny from regulators and politicians over risks tied to insider trading, market manipulation, and controversial event-based contracts.
The updated rules include stricter market design standards, clearer resolution criteria governing how outcomes are settled, and more precisely defined data sources. Polymarket also said it is enhancing monitoring and surveillance measures to detect suspicious trading activity. Additionally, the company said it would limit certain categories of markets, including those considered easily manipulated or ethically sensitive.
The announcement came just days after Major League Baseball signed a deal with Polymarket, alongside a separate agreement with the CFTC centered on so-called integrity protections. These arrangements are seen as part of a broader effort to legitimize prediction markets through institutional partnerships and closer regulatory alignment. The timing underscores the platform’s push to establish itself as a credible, regulated trading venue.
Ethical concerns surrounding the platform have intensified in recent months. In one widely cited case, a small group of Polymarket accounts reportedly generated roughly $1 million in profits by correctly timing bets on US strikes on Iran, raising questions about potential insider trading and market fairness. As reported by Bloomberg, all six accounts involved were newly created in February and had only ever placed wagers on whether those strikes would occur.
Last week, Polymarket said it had banned and reported users who directed death threats at an Israeli journalist, pressuring her to amend a news article about an Iranian missile strike that was the subject of a $17 million prediction market. The incident drew significant attention to the potential for bad actors to influence both media coverage and market outcomes. The company’s response was cited as an example of its efforts to enforce conduct standards on the platform.
Prediction markets have grown substantially in popularity, attracting a rising number of active traders placing wagers on real-world events. That momentum helped Polymarket raise $200 million in July and reportedly pursue a valuation of up to $10 billion. Despite this growth, several US states have taken action against prediction platforms, alleging they operate as unlicensed gambling services, reflecting the continued regulatory uncertainty facing the sector.
Originally reported by CoinTelegraph.
