On March 23, Polymarket announced updates to its DeFi platform and market integrity rules for its U.S. exchange regulated by the Commodity Futures Trading Commission (CFTC). The revised rules are now included in the platform’s Terms of Use and U.S. rulebook, reinforcing restrictions on insider trading and market manipulation while improving transparency.
Core Rule Updates on Insider Trading
The updated framework defines three prohibited behaviors: trading based on stolen confidential information, using improperly disclosed insider information, and participating in markets where the user has influence over event outcomes. These measures aim to reduce risks caused by information asymmetry.
Market Integrity and Regulatory Alignment
Polymarket’s update reflects a broader trend of DeFi platforms aligning with traditional financial regulatory standards. Under CFTC oversight, platforms must ensure fair trading conditions and transparency, preventing manipulation that could disrupt market stability. This signals a shift toward stricter compliance in crypto prediction markets.
The Role of KYT in Risk Monitoring
To combat insider trading and manipulation, Trustformer KYT enables real-time on-chain analysis, identifying abnormal transaction patterns and high-risk addresses. With advanced risk models, platforms can detect suspicious behavior early and take proactive measures to maintain fair and secure operations.
Building a Secure and Compliant DeFi Ecosystem
As regulatory expectations rise, DeFi platforms must implement end-to-end monitoring of both transaction behavior and fund flows. Integrating solutions like Trustformer KYT enhances compliance capabilities, strengthens user trust, and supports the sustainable growth of the digital asset market.