Polymarket Taps Chainalysis To Monitor Market Integrity And Flag Insider Trading

Polymarket has selected blockchain surveillance firm Chainalysis to deploy what it describes as a “first-of-its-kind” onchain solution for monitoring market integrity across its prediction markets.

In a release shared with Bitcoin.com News on Thursday, Chainalysis said it will provide “a comprehensive suite of tools designed to enforce Polymarket’s Market Integrity Rules” on the platform.

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The agreement spans multiple Chainalysis product lines, including investigative tools that produce “blockchain-verified evidence” for potential engagement with law enforcement and regulatory inquiries.

Polymarket’s approach is built around the idea that “every trade, position, and settlement is recorded on a public ledger,” with Polymarket saying it operates “entirely onchain.”

Polymarket founder and CEO Shayne Coplan framed the partnership as a transparency-and-enforcement package, saying, “Polymarket was built onchain because transparency matters, and our platform shows what markets can look like when trades are open, traceable, and accountable by design.”

Chainalysis co-founder and CEO Jonathan Levin echoed that transparency is the foundation for integrity enforcement, stating, “On Polymarket all trades and all settlements are recorded on a blockchain — a level of transparency that traditional markets simply cannot match.”

The Defiant similarly described the deal as a custom on-chain detection model intended to “flag insider activity,” and it said the framework sits on top of Polymarket’s “existing multi-layered monitoring system.”

At the center of the Chainalysis deal is a detection model built on Chainalysis Data Solutions and designed to identify patterns consistent with insider knowledge in prediction markets.

Bitcoin News said the partnership introduces “bespoke anomaly models to detect insider trading patterns on public blockchains,” and it described the core as a “bespoke anomaly detection model built on Chainalysis Data Solutions, specifically designed to identify patterns consistent with insider knowledge.”

Bitcoin News

CoinMarketCap likewise said Chainalysis will deploy “on-chain monitoring tools and investigative software to identify trading patterns consistent with the use of nonpublic information,” and it added that the tools will produce “blockchain-verified evidence for use in law enforcement and regulatory inquiries when needed.”

Decrypt described the collaboration as including investigative tools for generating blockchain-verified evidence, “on-chain threat prevention,” and professional services covering training, detection development, and complex investigations.

The Defiant stated the agreement spans investigative tools “to produce blockchain-verified evidence for engagement with law enforcement,” along with “on-chain security capabilities for threat prevention” and professional services to deploy the system and train Polymarket’s team.

Polymarket’s public messaging ties the monitoring to enforcement, with CoinMarketCap quoting the company’s announcement: “Insider Trading Is Not Welcome on Polymarket” and “This 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.”

The same theme appears in Decrypt, which said the collaboration is designed to “detect insider trading and enforce compliance rules on the platform,” and it described the detection model as identifying “patterns suggesting insider knowledge in prediction markets.”

Taken together, the sources portray a system that not only flags suspicious behavior but also generates materials intended for outside scrutiny, with Chainalysis’ tools positioned as “blockchain-verified evidence” rather than informal reports.

The Chainalysis partnership arrives as Polymarket faces heightened insider-trading scrutiny tied to U.S. enforcement actions and regulatory pressure.

CoinMarketCap said the move came as Polymarket sought to raise $400 million and obtain CFTC approval to reopen its platform to US users, and it noted that it settled with the CFTC in 2022 over allegations that it offered illicit binary options contracts.

It also said Polymarket acquired CFTC-regulated derivatives exchange QCEX in 2025 to establish a compliant US platform.

CoinMarketCap further tied the integrity push to a Department of Justice arrest, saying the DOJ arrested an active-duty US Army soldier on April 23 for allegedly placing bets on Polymarket using confidential information ahead of the capture of former Venezuelan President Nicolas Maduro.

The Defiant provided additional detail, stating that 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 large winning bets on the US capture of Nicolas Maduro, generating “roughly $409,881 in profits from about $33,000 in wagers, according to prosecutors.”

Decrypt similarly said the Department of Justice arrested and charged an active-duty U.S. Army soldier for allegedly using confidential information to place bets on the platform ahead of former Venezuelan President Nicolás Maduro's capture, and it identified the defendant as Gannon Ken Van Dyke.

Decrypt added that Van Dyke allegedly used the insider info to place “over $33,000 worth of bets on Polymarket” and then scored “nearly $410,000 in winnings,” and it said Van Dyke pleaded not guilty this week to the charges.

CoinMarketCap also referenced a separate academic study covering all Polymarket transactions from 2023 through 2025 that found that 3.14% of accounts consistently predicted both short-term price moves and final outcomes, and it said that group “captured more than 30% of total gains while representing under 3.5% of all accounts.”

In parallel, Cointelegraph said the deal followed “backlash over alleged insider-informed betting activity,” and it cited that the US Senate passed an amendment to Standing Rules on Thursday that would immediately prohibit senators from trading on prediction markets.

Beyond the insider-trading case, the sources connect Polymarket’s integrity upgrade to its regulatory posture and its push for capital and expansion.

CoinMarketCap said Polymarket is seeking to raise $400 million at a $15 billion valuation, and it described the platform as needing CFTC approval before it can relaunch its main product for US users.

Blockonomi

It also said Polymarket settled with the CFTC in 2022 and later acquired QCEX in 2025 to establish a compliant US platform, placing the Chainalysis move in a broader compliance arc.

Decrypt described the partnership as a “strategic pivot toward institutional standards” and tied it to “explosive growth,” saying weekly trading volume either approached or exceeded $1 billion for most of the year.

Decrypt also reported that Polymarket upgraded exchange infrastructure “just this week,” introducing “CTF Exchange V2 smart contracts,” “a rewritten central limit order book engine,” and “Polymarket USD (pUSD) as a new collateral token.”

CoinMarketCap similarly said the partnership is aimed at repositioning Polymarket as a credible financial platform with market integrity standards closer to those of traditional exchanges.

Crypto.news framed the system as “real-time analytics on trades, positions, and settlements on public blockchains” intended to “flag suspicious behavior” and support enforcement of platform rules.

It also said Polymarket’s monitoring is meant to reassure “regulators and institutions,” and it described the goal as establishing “a new compliance standard in the predictive market field.”

Cointelegraph added that New York has filed lawsuits against exchange operators Coinbase Financial Markets and Gemini Titan alleging their prediction market offerings violate state gambling laws, and it described a regulatory tug-of-war between US states and the federal Commodity Futures Trading Commission.

Even as the sources emphasize compliance, they also describe the scale of activity and the breadth of markets, with CoinMarketCap saying trading volumes across prediction market platforms have risen as users place wagers on outcomes spanning “sports, politics, economics, pop culture, and weather.”

The sources portray the Chainalysis monitoring as both an internal enforcement mechanism and a signal to external stakeholders that Polymarket intends to treat insider trading and manipulation as unacceptable.

CoinMarketCap quoted Polymarket’s announcement that “Insider Trading Is Not Welcome on Polymarket” and said “those who attempt it will be identified,” positioning the system as a deterrent backed by traceable data.

CoinDesk

Decrypt said Polymarket detected the conduct in the Van Dyke matter and “reported it to authorities ahead of the arrest,” and it described the new compliance upgrade as part of a broader institutional shift.

Crypto.news described the monitoring as layering “multi-stage monitoring over open ledgers” to automatically surface “anomalous patterns” such as “suspiciously timed position builds ahead of key events” and “coordinated wash trading,” with the stated aim that they can be investigated and sanctioned under Polymarket’s market rules.

Cryptonews.net framed the effort as “Wall Street-level oversight,” describing Chainalysis as bringing tools to “flag suspicious behavior” and emphasizing that “every trade is recorded onchain,” enabling tracing and analysis after the fact.

Cointelegraph added that Polymarket has already implemented “stricter trading safeguards to address concerns about manipulation,” and it described the Chainalysis step as bolstering those safeguards.

The Defiant said the deal 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.

Bitcoin News said Polymarket’s existing monitoring system was already designed to catch potential violations of the platform’s “strict Terms of Use,” and it described the new technology as allowing the platform to report suspicious activity to regulators with “credible, immutable data.”

Across the reporting, the practical consequence for users is that Polymarket is expanding the onchain surveillance and evidence pipeline it says it will use to enforce its rules, while also seeking to reassure regulators and institutions that its markets can be monitored with blockchain-verified records.