Polymarket Partners With Chainalysis to Monitor Insider Trading on Prediction Markets

TLDR

• Polymarket has partnered with Chainalysis to monitor and detect insider trading on its platform
• A US Army soldier was arrested by the DOJ for using classified info to bet on Polymarket
• The US Senate passed an amendment banning senators from trading on prediction markets
• Polymarket is seeking to raise $400 million at a $15 billion valuation and wants CFTC approval to relaunch in the US
• Monthly trading volumes on prediction markets hit $25.7 billion in March 2026

Prediction market platform Polymarket has teamed up with blockchain analytics firm Chainalysis to crack down on insider trading and market manipulation. The company announced the partnership on Thursday.

Chainalysis will provide tools to detect suspicious trading patterns and help produce blockchain-verified evidence for law enforcement and regulatory inquiries.

The announcement comes after a series of controversies involving traders who appeared to profit from non-public information tied to real-world events.

Last week, the Department of Justice arrested an active-duty US Army soldier. He allegedly used classified information to place winning bets on Polymarket ahead of the capture of former Venezuelan President Nicolás Maduro.

The move also comes as Polymarket is seeking to raise $400 million at a $15 billion valuation, according to a report from The Information.

Regulatory Pressure Builds

The company is also pushing for approval from the Commodity Futures Trading Commission to relaunch its main platform in the US. Polymarket previously settled with the CFTC in 2022 for allegedly offering illicit binary options contracts.

It later acquired derivatives exchange QCEX, a CFTC-regulated platform, and launched a US version of its service last year.

On Thursday, the US Senate passed an amendment to its Standing Rules that would immediately ban senators from trading on prediction markets.

New York has also filed lawsuits against exchange operators Coinbase Financial Markets and Gemini Titan, claiming their prediction market products violate state gambling laws.

Volumes Keep Rising Despite Scrutiny

Despite the controversy, trading volumes on prediction markets have surged. Monthly volumes reached $25.7 billion in March 2026, according to a report by Bitget Wallet and Polymarket.

Retail traders are driving much of this activity, with a shift toward more regular participation rather than one-off bets.

An academic study analyzing every Polymarket transaction from 2023 through 2025 found that just 3.14% of accounts qualified as “skilled winners.”

That small group, along with market makers, captured more than 30% of all gains while making up under 3.5% of all accounts.

Rival platform Kalshi has also been working to address insider trading concerns as both companies pursue multi-billion dollar valuations.

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