Polymarket has examined dozens of bets linked to the upcoming U.S. midterm elections for signs of possible insider trading and market manipulation. At least two of those matters have been referred to the Commodity Futures Trading Commission, according to details shared by the company's investigations leadership.

Shana Bautista, Polymarket’s head of global intelligence and investigations, described the activity. A former FBI official who joined the firm in June, Bautista oversees a 16-person team that is applying heightened scrutiny to election-related trading ahead of the November 3 vote.

Surveillance System Generates Hundreds of Daily Alerts

The company is relying on a newly deployed monitoring system designed to flag potential problems in real time. The tool incorporates data from social media, Federal Election Commission filings, cryptocurrency firms, banking partners and statistical models. It produces hundreds of alerts each day for the team to review.

Bautista said the system collects substantial volumes of information on users and triggers reviews when internal thresholds are crossed. Specific criteria for the alerts have not been disclosed for security reasons.

Polymarket operates a U.S.-regulated exchange that requires identity verification and a separate international platform where users can trade anonymously with cryptocurrency. Bautista stated that her team has been able to identify the likely individuals behind trades in every case reviewed, even when activity occurs on the international venue.

Broader Context of Election Market Oversight

Prediction markets tied to elections have drawn increased attention because of the potential for participants with nonpublic information to seek an advantage. Campaign staffers have previously described placing bets based on unreleased internal polls, and regulators have examined related activity.

In one earlier case, the CFTC brought its first insider-trading action involving an event contract against an active-duty Army soldier accused of using classified information to trade on contracts related to a foreign political figure. That matter involved more than $404,000 in gains on one contract. Polymarket said it had detected and reported the activity.

Rival platform Kalshi has implemented its own measures, including blocks on certain campaign staffers and employment disclosure requirements for higher-risk markets. It has reported opening more than 150 investigations and referring more than 20 cases to law enforcement.

The CFTC has issued guidance cautioning that certain “mention” contracts—those based on whether a named individual says particular words or attends an event—may be especially open to manipulation. The agency has largely left day-to-day surveillance of prediction markets to the platforms themselves.

Polymarket’s rules prohibit insider trading and market manipulation and permit the company to restrict accounts or refer matters to authorities. The midterm elections are scheduled for Tuesday, November 3.