Polymarket taps Chainalysis to bring Wall Street-level oversight to crypto prediction markets

Crypto-based prediction market Polymarket has tapped blockchain analytics firm Chainalysis to monitor trading activity and enforce its market rules, as it works to address concerns about insider trading and market integrity.

Chainalysis brings a suite of tools, including investigative software and onchain monitoring systems, to flag suspicious behavior, based on a model designed to identify patterns consistent with traders acting on non-public information, the firms announced on Thursday.

The move comes amid growing scrutiny of prediction markets. Critics have argued that platforms like Polymarket could be vulnerable to insiders — such as political operatives or corporate employees — placing informed bets before information becomes public. In traditional finance, such activity is illegal and closely monitored. In crypto-based markets, enforcement has been less clear.

Polymarket’s response is to lean into the transparency of blockchain. Because every trade is recorded onchain, activity can be traced and analyzed after the fact. By layering Chainalysis’ data tools on top, the company aims to detect suspicious trades in real time and, if needed, share evidence with regulators.

In simple terms, Polymarket is bringing in a kind of digital police force. The goal is to show that even in a decentralized environment, rules can be enforced. The broader aim is to reposition Polymarket as a credible financial platform rather than a crypto betting site.

“Polymarket was built onchain because transparency matters, and our platform shows what markets can look like when trades are open, traceable, and accountable by design,” said CEO Shayne Coplan.

Coplan has argued that prediction markets serve a broader purpose than speculation. He described them as “a very useful thermometer of the world,” where prices reflect the probability of real-world outcomes, at an event in New York this week.

Still, that usefulness depends on trust. If users believe markets are being skewed by insiders, prices become less reliable. That risk has grown as Polymarket has expanded, gaining mainstream attention during events like elections and attracting both retail traders and institutional interest.

Coplan has emphasized building something durable, focusing on products that “last” instead of chasing short-term trends.