According to The Information, Polymarket – a prediction market platform aiming for a valuation of around $20 billion – has begun scrutinizing a number of startup apps that promise to help users "track" big-earning traders, potentially including accounts suspected of trading based on insider information.
The article states that Polymarket had Capital been under pressure to regulate insider trading. Late last year, they even launched a program to support startups building apps to place orders on Polymarket. However, some apps quickly turned accounts suspected of "trading on insider information" into something to sell to users – providing lists/news items that customers could copy. Now, Polymarket is auditing these startups.
The startups under scrutiny are primarily "copy-trading apps": they track high-performing traders, detect unusual order placements (very large bets, strange timing, etc.), and suggest that these might be based on undisclosed information. Users can use bots to copy orders or receive notifications when there are promising trades. These apps charge a fee for this service.
The Information cites examples such as Polycool – a startup that participated in Polymarket's developer program – which posted content on its website titled "Guide to insider trading on Polymarket," arguing that the prediction market "is not like the stock market." Another app, Kreo, promotes itself as being able to help users "find insiders before others."
Both Polymarket and its major competitor Kalshi have been scrutinized for insider trading. Last month, Polymarket released a clearer set of rules regarding insider trading and how violations will be handled.
According to the article, these copy-trading apps contributed to an increase in Polymarket's trading Volume by "hundreds of millions of dollars".
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The article "Polymarket reviews a series of startups suspected of helping users 'detect' insider trading" first appeared on CoinMoi .
