Polymarket says it is prepared to police trading on its platform as the approaching U.S. midterm elections put prediction markets under increased scrutiny. Shana Bautista, who joined Polymarket in June as global head of investigations and intelligence, described the company's enhanced controls and readiness to identify abnormal activity tied to election markets.
"I 27m confident that I 27m able to get the resources and the support I need," Bautista said in her first interview since joining the company. "I can tell you that we have the systems in place to be able to identify anomalous activity when the midterms do come."
Polymarket has attracted attention from lawmakers concerned that rapid growth in prediction markets could open new channels for insider trading and pose risks to national security and election integrity. Those lawmakers worry markets might be used to undermine confidence in candidates or election officials or to cast doubt on electoral outcomes. At the same time, several U.S. states are pursuing litigation to exclude prediction markets from sports betting frameworks.
Polymarket's international trading venue settles wagers on a blockchain, which makes trade activity public while preserving trader anonymity. Critics have argued that public settlement on-chain with anonymous actors could enable misconduct. Bautista countered that blockchain settlement provides valuable visibility into trader behavior and can aid detection efforts.
The company, founded in 2020, says it has been strengthening its compliance and surveillance capabilities and intends to make its approach to policing markets more transparent. A company spokesperson said Polymarket will publish a new web page describing how it protects market integrity and cooperates with law enforcement.
Bautista said the forthcoming page will detail the tools and techniques the company uses, including machine learning, blockchain analytics, trade surveillance, open-source research and collaboration with third-party specialists. "The market integrity program itself is not new, but what we're putting on the record now is considerably more detail about how it operates," she said.
Polymarket also reports it has referred more than a hundred cases to law enforcement. Bautista said those referrals include activity tied to a wallet used by a U.S. service member who prosecutors say used classified information to place a bet on the capture of Venezuela's Nicolas Maduro, as well as many potential insider bets related to U.S. military actions in Iran.
Regulatory actions have shaped the company's U.S. presence. In 2022 the Commodity Futures Trading Commission fined Polymarket for failing to register with the agency and required the company to block U.S. users from its international platform. Despite that settlement, analysts have observed indications that U.S. participants continue to access the platform. Polymarket says it is working to keep U.S. users off the international site and that its systems can block the large majority of U.S. customers.
"It is difficult at scale to be able to consistently and always evade all of the guardrails we have," Bautista said. "I do not see it being a really prevalent issue." She expressed confidence in securing support and resources to maintain those protections.
Polymarket's interactions with federal regulators have shifted over time. Under the prior presidential administration, which took a favorable view of prediction markets, federal regulators discontinued a probe into whether the company had breached its settlement. At the time Polymarket chief executive Shayne Coplan said the company had been cleared of wrongdoing. Last year the firm re-entered the U.S. market by acquiring a U.S.-registered exchange.
As the midterms approach, Polymarket is positioning its market-integrity program as the core defense against illicit activity while also preparing to disclose more about how that program operates. The company frames blockchain settlement as both a source of risk critics cite and a tool the company uses to monitor activity, and it says law enforcement referrals demonstrate ongoing efforts to address potential misconduct.
For market participants, regulators and security officials, the coming months will test whether the technical and human controls Polymarket describes are sufficient to prevent misuse without new incidents. Polymarket's stated approach focuses on automated detection, blockchain visibility and cooperation with authorities as the primary levers it will use to manage those risks.