Polymarket hires Chainalysis to bring Wall Street-level regulation to the crypto prediction market.

Huoxun Finance reports that prediction market platform Polymarket has partnered with blockchain analytics firm Chainalysis to monitor trading activity and enforce market rules, addressing concerns about insider trading and market integrity. Announced on Thursday, the two companies will provide investigative software and on-chain monitoring systems to identify suspicious activity. Chainalysis's models can detect patterns matching "trading using non-public information." This collaboration comes against the backdrop of increased regulatory scrutiny of prediction markets. Some argue that platforms like Polymarket may be susceptible to influence from insiders (such as political workers or corporate employees) who could exploit informational advantages to trade before it is publicly available. While traditional financial markets explicitly prohibit and strictly regulate such behavior, the regulatory boundaries for crypto prediction markets remain unclear. By leveraging the end-to-end traceability of blockchain transactions and combining it with Chainalysis's data tools, Polymarket aims to detect suspicious transactions in real time and submit evidence to regulators when necessary, thereby enhancing market transparency and compliance.