Polymarket has investigated "dozens" of bets on its prediction markets related to the midterm election, according to the company's head of global intelligence and investigations, Shana Bautista.At least two of these Polymarket investigations have been referred to its regulator, the U.S.Commodity Futures Trading Commission, according to a person who is familiar with the probes, but not authorized to speak publicly about them.These investigations into election insider trading and manipulation come as prediction market Polymarket — and its chief competitor Kalshi — have exploded in popularity over the past year.
But the fast-growing industry also faces significant legal challenges from states and political pushback from lawmakers who argue betting on the outcome of elections poses serious risks to the democratic process.In April, Kalshi banned and fined a handful of political candidates from betting on themselves.A month later, NPR reported that campaign staffers had made "thousands" using insider polling information to bet on their own candidates on platforms like Polymarket and PredictIt.Polymarket's Bautista — a former FBI official and cryptocurrency analyst — told NPR her team of 16 and a new election surveillance system are actively policing election bets ahead of the Nov.
3 midterms."If you have information that you have a duty to protect, don't trade on it," Bautista said."It's explicitly against our terms of use on both platforms, but also is against the law.
If you decide that you are smarter and can do it, we will find you."Bautista joined Polymarket in June.She oversees information gathered from both the U.S.-regulated version of Polymarket, which requires users to provide their real identities, and its bigger brother, Polymarket International, which is essentially unregulated and where trading can be done anonymously and with cryptocurrency.
Despite this, Bautista said crypto trades are rarely completely anonymous."There's never been a case that...