Polymarket has investigated “dozens” of bets on its prediction markets tied to the midterm election, according to Shana Bautista, the company’s head of global intelligence and investigations. The probes target suspected insider trading and market manipulation just days before the Nov. 3 vote. At least two of the cases have reached the company’s regulator, the U.S. Commodity Futures Trading Commission (CFTC), according to a person familiar with the investigations who could not speak publicly about them.

A Booming Industry Under Pressure

The investigations arrive as Polymarket and its chief competitor, Kalshi, have exploded in popularity over the past year. That rapid growth has drawn significant scrutiny. The industry now faces legal challenges from states and political pushback from lawmakers who argue that betting on election outcomes poses serious risks to the democratic process.

Enforcement problems have already surfaced this year. In April, Kalshi banned and fined a handful of political candidates for betting on themselves. A month later, NPR reported that campaign staffers had made “thousands” by using insider polling information to bet on their own candidates on platforms such as Polymarket and PredictIt.

Those episodes show how privileged political information can create an unfair edge in election markets. Campaign staffers, candidates and others close to the process often hold data that the public does not see. Polymarket now says it wants to catch anyone who tries to profit from that advantage.

A Former FBI Official Leads the Effort

Bautista, a former FBI official and cryptocurrency analyst, joined Polymarket in June. She leads a team of 16 people and a new election surveillance system that actively polices election bets ahead of the midterms. She described her approach to NPR and sent a direct message to anyone who holds confidential information.

“If you have information that you have a duty to protect, don’t trade on it,” Bautista said. “It’s explicitly against our terms of use on both platforms, but also is against the law. If you decide that you are smarter and can do it, we will find you.”

Her warning targets people who gain sensitive knowledge through their professional responsibilities. She stressed that the ban comes from two sources: Polymarket’s own rules and the law itself. The company, in other words, treats election insider trading as both a policy violation and a legal one.

Two Platforms, Two Levels of Anonymity

Bautista oversees information from two distinct operations. The U.S.-regulated version of Polymarket requires users to provide their real identities. Its larger sibling, Polymarket International, is essentially unregulated and lets users trade anonymously with cryptocurrency.

That split could look like a gap in oversight, since anonymous crypto accounts might seem hard to trace. Bautista rejected that idea. She said crypto trades are rarely completely anonymous, and she pointed to her team’s record of finding the people behind suspicious activity.

“There’s never been a case that we work where we haven’t been able to identify, potentially, who these people are,” Bautista said.

Her wording leaves some room, because she said investigators can identify people “potentially.” Even so, the claim signals that Polymarket believes anonymity offers little protection to anyone who trades on protected information. The company wants would-be violators to hear that message before the election.

How the Surveillance System Works

The surveillance system draws on a wide range of sources. According to Bautista, it pulls “gigabytes” of data on each user from social media, Federal Election Commission data, cryptocurrency companies, banking partners, statistical models and other public information sources. By combining those streams, the system builds a detailed picture of who is trading and what they might know.

The setup works through internally defined red flags. When a user hits a certain number of those flags, Bautista gets an alert on her phone. The company has not detailed what the flags are, so the exact triggers remain unclear.

The volume of alerts shows how much activity the team must sort through. Bautista said the system produces a substantial stream of notifications every day.

“We’re getting hundreds of alerts a day,” Bautista said.

What the Probes Mean for Prediction Markets

The dozens of investigations and at least two referrals to the CFTC show that Polymarket now treats election integrity as a core enforcement priority. The company operates under heavy outside pressure, and lawmakers have questioned whether election betting belongs in the market at all. Visible enforcement may help the company answer critics who say these platforms invite abuse.

The earlier cases at Kalshi, PredictIt and Polymarket show that the risk is real. Candidates and campaign staffers have already tried to profit from their own races. Bautista’s team now has the tools to track that behavior, and the company has put would-be violators on notice.

The coming weeks will test those tools. With the Nov. 3 midterms near, trading on election outcomes will likely intensify, and so will the alerts that reach Bautista’s phone. Her message to anyone tempted to use confidential information is unambiguous: Polymarket says it will find them.

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Polymarket paid mostly college-age creators to stage fake winning bets on copycat versions of its website, according to a Wall Street Journal investigation published Saturday. The report found that none of the roughly $1.9 million in bets shown across 1,105 videos were real. The company’s core pitch claims that Polymarket settles every real trade on a public blockchain that anyone can audit, but the findings contradict this. The growth campaign relied on staged trades on fake sites that no ledger could verify. This directly contradicts the transparency promise central to blockchain-based financial products.

The Journal reviewed videos from 10 creators posted between December 2025 and mid-May. A bet appeared in about 70% of them. One January clip showed a creator winning $100,000 on a bet that President Donald Trump would say “McDonald’s” that month. The footage of Trump saying the word was two months old. More than 50 real accounts placed the same bet in January, and all of them lost, the investigation found.

Polymarket built dummy sites for the videos, including one at the misspelled URL “poiymarket.com,” which resembles the true “polymarket.com” domain when the ‘i’ is capitalized. Across 118 videos, creators celebrated roughly $900,000 in fabricated wins. The same bets would have lost more than $166,000 on the real platform. Creators earned about $2,000 to $3,000 a month and were told not to disclose the payments, according to the investigation.

How the Deceptive Marketing Operation Functioned

Real Polymarket trades run on the Polygon blockchain and settle in USDC. Markets resolve through UMA’s permissionless oracle, where anyone can propose or dispute an outcome by posting a $750 bond. Every position is public. The marketing operation lived entirely off that ledger. The practice is particularly problematic because real users can place identical bets, leading to actual financial losses. This creates a misleading impression of profitability that the platform’s own public data contradicts.

A hired marketing firm pushed the clips past 140 million views. The campaign specifically targeted American users, who can still reach the offshore site through a VPN. Trust questions are not new for the platform. A separate Journal analysis found most users lose money, even as the videos sold easy profit. Polymarket told the Journal it is committed to accurate, fair markets and will audit its promotional content.

Timing Complicates US Market Reentry Plans

The revelation arrives at an awkward moment for Polymarket. US regulators fined the company $1.4 million in 2022 for running an unregistered market and ordered the winding down of non-compliant trades. The company later reincorporated in Panama, with its headquarters reportedly a shared law office that also worked with FTX. Polymarket has since won a regulated US market entry and now wants to bring its exchange onshore. The fake campaign specifically targeted American users during this critical transition period.

Now competing with regulated rival Kalshi, Polymarket faces questions about how the scandal will affect regulatory scrutiny. Kalshi operates as a regulated US prediction market, creating a direct contrast with Polymarket’s offshore structure and now-exposed marketing tactics. The pattern echoes an earlier market resolution dispute that dented user trust. The company’s promised audit of promotional content may shape how regulators view its onshore push.

Blockchain Transparency Claims Undermined

The core contradiction lies in the platform’s foundational promise. Polymarket built its reputation on blockchain transparency, where every trade lives on a public ledger that anyone can verify. The Polygon blockchain records all genuine transactions, allowing users to track positions, outcomes, and market resolution in real time. This transparency serves as the platform’s primary competitive advantage over traditional betting markets.

The marketing campaign operated in complete opposition to these principles. The dummy sites used domain names designed to fool viewers when displayed quickly in video content. The fake bets never touched the blockchain, existed in no public record, and created outcomes that contradicted actual market results. Creators filmed winning scenarios that would have resulted in significant losses for real users who followed the same strategy. The disconnect between the promoted content and the platform’s verifiable reality raises questions about user protection and truth in advertising.

Impact on User Trust and Market Integrity

The investigation reveals a systematic effort to misrepresent platform outcomes. Real users who placed bets based on the apparent success shown in viral videos faced a fundamentally different reality. The $900,000 in fabricated wins across 118 videos created an illusion of easy profit that the platform’s actual performance data contradicts. The separate Journal analysis showing most users lose money compounds the ethical concerns around the marketing strategy.

The company’s decision to prohibit creators from disclosing payment relationships adds another layer of deception. Viewers had no way to know they were watching paid promotional content rather than genuine user experiences. The scale of the operation-reaching 140 million views-suggests significant resources went into building a false narrative about platform profitability. Polymarket’s commitment to audit its promotional content comes only after the investigation exposed the practice, raising questions about internal oversight and corporate responsibility.

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