Prediction market platform Polymarket says it has strengthened its market surveillance systems ahead of the 2026 U.S. midterm elections as regulators and lawmakers increase scrutiny of prediction markets.
Shana Bautista, Polymarket’s global head of investigations and intelligence, said the company has systems in place to identify unusual trading activity as the midterm elections approach. Bautista previously worked as an FBI investigator and Coinbase analyst before joining Polymarket in June.
The company said its market integrity program uses machine learning, blockchain analytics, trade surveillance, open-source intelligence and third-party data to identify potentially suspicious activity. Polymarket is also preparing a dedicated webpage explaining how its surveillance system works and how the company cooperates with law enforcement agencies.
Polymarket’s international platform operates on blockchain infrastructure, making trading activity publicly visible while keeping individual traders’ identities anonymous. According to Bautista, the availability of on-chain transaction data provides investigators with information that can be used to identify unusual patterns and potentially suspicious trading behavior.
The company said it has already referred more than 100 cases involving suspected misconduct to law enforcement authorities. These cases include allegations involving traders who may have used confidential or classified information when placing prediction market bets.
The issue has gained additional attention as prediction markets have expanded ahead of the U.S. midterm elections. Regulators and lawmakers have raised concerns about insider trading, market manipulation, election integrity and the potential misuse of nonpublic information.
Polymarket also continues to face restrictions involving U.S. users on its international platform. In 2022, the Commodity Futures Trading Commission (CFTC) fined the company for operating an unregistered facility and required it to block U.S. users from its international platform. Polymarket has since maintained that its controls are designed to prevent restricted users from accessing the platform.
Bautista said the company believes its current systems can prevent the vast majority of unauthorized U.S. users from trading on the international platform. Polymarket has also expanded its presence in the U.S. after acquiring a U.S.-registered exchange.
The company’s increased focus on surveillance comes as prediction markets face growing regulatory attention across the country. The CFTC has continued to assert its authority over federally regulated prediction markets, while several states have challenged the extent of federal jurisdiction over event contracts.
With the midterm elections approaching, Polymarket is expected to face increased scrutiny over how it monitors trading activity and handles potentially sensitive information. The company says its expanded surveillance infrastructure is designed to detect suspicious behavior while supporting market integrity and cooperation with authorities.
