Polymarket has started auditing startups in its developers program after reports said some apps helped users copy trades linked to suspected insider activity.
The review comes as the prediction market platform faces fresh scrutiny over how third-party tools use its data and trading flows. These tools are capable of tracking successful traders, flag unusual bets, and let users mirror those positions through bots or alerts.
The audit targets startups that built copy-trading apps on top of Polymarket’s platform, The Information reported on Tuesday.
Some of the traders followed by these apps may have had access to non-public information tied to the events being traded.
Meanwhile, the review arrives at a time when prediction markets face closer attention from regulators, lawmakers, and outside groups.
Polymarket and rival platform Kalshi have both faced questions in recent months over insider trading, contract design, and event markets tied to sensitive subjects.
Polymarket reviews copy-trading startups
Reports said Polymarket launched the audit after concerns grew around apps that promote ways to follow traders with strong winning records. These startups built services through Polymarket’s Builders Program, which the company introduced in November to support outside developers.
The apps under review do more than show public market data. They also sort accounts by performance, track large and well-timed trades, and send signals to paying customers. In some cases, users can set bots to copy those trades automatically.
That model drew attention because it may reward accounts that appear to trade with early or private knowledge.
One startup named in the reports is Polycool. Its website reportedly includes a page described as a “guide to Polymarket insider trading.” Another startup, Kreo, has promoted tools that help users ”find insiders before the rest.”
Those messages have increased pressure on Polymarket to review how startups in its ecosystem market their products.
Polymarket did not immediately comment on the report. Still, the audit shows the company is responding to growing concern over whether some trading tools cross a line between market analysis and conduct tied to nonpublic information.
Pressure builds over insider trading rules
The issue of insider trading has followed prediction markets as the sector has grown. These platforms allow users to trade on the outcome of real-world events, from politics and policy to sports and global news.
Last month, Polymarket introduced clearer rules and enforcement steps around insider trading. The company moved to tighten its standards after criticism that some event contracts could reward early access to information.
The latest audit suggests Polymarket is now looking beyond users and into the app makers connected to its platform.
Reports said some copy-trading startups gave customers lists of traders with strong records and flagged bets placed at unusual times or in unusual size.
Customers then used those insights to mirror positions for a fee. These services appear to have helped drive hundreds of millions of dollars in extra trading volume on Polymarket.
That growth may have helped activity on the platform, but it also raised harder questions about market fairness. If users can pay to copy trades from accounts suspected of using nonpublic information, the platform risks more criticism over how it monitors trading behavior.
Audit follows wider scrutiny of prediction markets
The audit comes only days after Polymarket removed a market tied to the rescue of U.S. service members in Iran. The contract drew backlash from lawmakers and members of the public, who argued that an active military operation should not be turned into a tradable event.
That market allowed users to bet on when the U.S. government would announce the rescue of two airmen after an F-15E Strike Eagle incident in Iran.
Critics said the contract was not appropriate because the operation was still ongoing and the safety of those involved was not yet clear. Polymarket later removed the market after the criticism grew.
In addition, the broader sector also faces pressure from U.S. lawmakers and regulators. A group of senators has asked the Commodity Futures Trading Commission to ban contracts tied to individual deaths. They raised ethical and national security concerns around such markets.
At the same time, the CFTC took legal action against three states over steps the agency says were meant to avoid federal oversight of prediction markets.
Major sports groups have also started to weigh in. As reported by Coin Headlines, the NFL asked prediction market firms to avoid contracts that could be manipulated or decided before games begin.
Growth continues as concerns rise
Despite the new pressure, prediction market platforms continue to grow. Polymarket’s valuation has climbed sharply over the past two years. Reports said the company is now seeking a valuation of about $20 billion, a major rise from earlier funding rounds.
The company raised $45 million in a Series B round in May 2024, with Founders Fund leading the investment and Ethereum co-founder Vitalik Buterin joining the round. In early 2025, it reportedly raised another $150 million at a $1.2 billion valuation.
In Oct. 2025, an investment from Intercontinental Exchange, the parent company of the New York Stock Exchange, reportedly pushed the valuation to $12 billion.
That fast expansion has made Polymarket one of the best-known names in prediction markets. It has also increased attention on how the platform handles risk, compliance, and third-party development.