Polymarket Defends Insider Trading Rules After Senate Attack
Polymarket Deputy Chief Legal Officer Olivia Chalos said the platform operates in full compliance with applicable law and its insider trading rules match CFTC standards for derivatives markets.
Key Takeaway
Polymarket's defense sets up a test case for whether crypto prediction markets can survive Washington's scrutiny.
Polymarket Deputy Chief Legal Officer Olivia Chalos fired back at accusations the crypto prediction market operates outside the law, saying the platform operates in full compliance with applicable law and that its insider trading rules match the exact standards the CFTC and courts draw for derivatives markets. The platform shares a commitment to national security and market integrity, she added.
The defense came after Senator Richard Blumenthal sent a letter to Polymarket founder Shayne Coplan on Thursday demanding an explanation. Blumenthal accused the platform of operating as an illicit market that lets users profit off national security secrets by betting on deaths of heads of state and military events.
Blumenthal called Polymarket's new insider trading rules paltry, inadequate, and late. The platform released those rules last month after explosive growth in 2024 when users bet billions on the US presidential election. His letter claimed prediction markets turn a blind eye to or encourage the use of secrets.
Earlier this week, other lawmakers flagged an Iran rescue betting market on the platform. Polymarket removed that market. Multiple lawmakers introduced bills this year to regulate betting platforms, with one attempting to block federal officials from making bets on Polymarket.
The platform operates a CFTC-regulated US exchange and a DeFi platform on Polygon blockchain where users deposit USDC to make bets. Robinhood and Coinbase both started offering prediction market services after Polymarket's 2024 surge. CFTC Chair Michael Selig has been identified as a powerful ally to the prediction markets industry as of April 2026.
This article was written based on reporting from Dlnews.
