Polymarket has launched an audit of startups it backed through a support program after discovering they were facilitating insider trading on the platform. The move comes as the prediction market faces mounting pressure to address illicit trading activity.
Polymarket created a startup accelerator program last year to boost platforms sending trades to its market. Companies in the program, including Kreo and Polycool, quickly began offering customers access to suspected insider trading accounts, effectively monetizing advance knowledge of company developments.
Kreo markets itself as helping users "find insiders before the rest," while Polycool explicitly advertises as a "guide to Polymarket insider trading." These services allowed retail users to copy trades from accounts with apparent advance information about earnings, regulatory decisions, and other material events.
The audit represents a significant reversal for Polymarket, which had positioned the startup program as a growth initiative. Regulatory scrutiny over prediction markets has intensified, with lawmakers questioning whether platforms adequately police illegal trading activity. Insider trading on prediction markets remains a gray area legally, though the SEC has indicated enforcement interest in the space.
Polymarket has not disclosed audit findings or whether it will remove startups from its program.
The SEC has postponed a plan that would have granted broad exemptions allowing US crypto firms to trade tokenized versions of stocks. The delay affects a significant expansion of crypto assets linked to traditional equities.
Kelp DAO has completed recovery of its restaked Ether token following a five-week effort to address a $293 million exploit attributed to North Korea's Lazarus Group in April.
Morgan Stanley launched a cryptocurrency trading pilot on E*Trade with lower fees than Coinbase, Robinhood, and Charles Schwab. The firm plans a broader rollout in 2026.
Crypto exchange Bullish agreed to acquire UK-based financial services outsourcing firm Equiniti from Siris Capital for $4.2 billion. The deal is expected to close in January 2027.