Predictions market major Polymarket refreshed its market integrity rules on Monday, enforcing the guidelines across its DeFi platform as well as its main platform. In order to navigate the presently scrutinized outlook against prediction markets, Polymarket is tightening its noose around cases of insider trading and the subsequent risk of market manipulation.
Polymarket, with its updated guidelines, is adding a layer of “prohibition” on different kinds of conducts that resemble insider trading.
Trading on the basis of stolen classified information, illegal tips, and influence over an ongoing event have essentially been banned on Polymarket, deeming them a direct breach of platform guidelines.
“Markets thrive on clarity These rule enhancements make our expectations abundantly clear for every participant across both platforms and highlight the compliance infrastructure we have already built,” said Neal Kumar, Chief Legal Officer of Polymarket, doubling down on the platform’s aim of scaling this year.
Earlier last week, Polymarket was slapped with a nation-wide ban in Argentina. The country deemed the platform as an unlicensed entity offering online gambling services.
The platform, that lets users buy and sell shares in the future outcome of real-world events, has been meeting with a similar fate in other regions including France, U.K., Germany, Singapore, and Australia as well within multiple U.S. states like Nevada and Massachusetts.
It seems natural that Polymarket is taking pro-active measures to propagate an impression that its platform is safe against market manipulation tactics at least until comprehensive rules to oversee prediction markets evolve internationally.
The U.S. has already started to take its first steps into regulating these platforms that are also making speedy inroads into the crypto ecosystems.
Last week, the Commodity and Futures Trading (CFTC) proposed that prediction markets must be required to get a clearance from the agency. Additionally, it said these platforms must restrict the trading of contracts that are susceptible to manipulation.
Polymarket has aligned its refreshed guidelines with CFTC’s outlook on how comprehensive regulations could look like for prediction markets.
Meanwhile, the platform has encouraged its users to become whistleblowers on suspicious trades that could be in breach of its independent rules.
“If a participant is found to have violated Polymarket US’s rules or applicable law, sanctions may include suspension, termination, monetary penalties, or referral to regulatory or law enforcement authorities,” it noted.