Cryptocurrency-based prediction market Polymarket has hired blockchain analytics firm Chainaanalysis to monitor trading activity and enforce its market rules to address concerns about insider trading and market integrity.
Chainaanalysis brings a suite of tools, including investigative software and an on-chain monitoring system to flag suspicious behavior, with models designed to identify patterns consistent with traders acting on non-public information, the companies announced Thursday.
The move comes amid growing scrutiny of prediction markets. Critics argue that platforms like Polymarket can be susceptible to influence from insiders, such as politicians or corporate employees, who place informed bets before the information becomes public. In traditional finance, such activities are illegal and closely monitored. In cryptocurrency-based markets, execution is less clear.
Polymarket responded by leaning toward blockchain transparency. Since every transaction is recorded on-chain, activity can be tracked and analyzed after the fact. By layering Chainaanalysis’ data tools, the company aims to detect suspicious transactions in real time and share evidence with regulators when needed.
Simply put, Polymarket is introducing a digital police force. The goal is to show that rules can be enforced even in a decentralized environment. The broader goal is to reposition Polymarket as a trusted financial platform rather than a cryptocurrency gambling site.
CEO Shayne Coplan said: “Polymarket was built on-chain because transparency is important, and our platform demonstrates what markets can look like when transactions are open, traceable, and responsibly designed.”
Copeland believes that prediction markets have broader uses than speculation. At an event in New York this week, he described them as “a very useful thermometer for the world,” where prices reflect the probabilities of real-world outcomes.
However, this usefulness depends on trust. If users believe the market is influenced by insiders, prices become less reliable. That risk has grown as Polymarket has expanded, gaining mainstream attention during events like elections and attracting interest from both retail traders and institutions.
Copeland emphasizes building durable products, focusing on products that “last” rather than chasing short-term trends.
