Polymarket Head Says Team Investigated Dozens of Midterm Election Bets

Shana Bautista, Polymarket’s head of global intelligence and investigations, confirmed on October 27 that her team has examined dozens of election-related bets on the platform. This activity is part of a push to clean up trading ahead of the November 3 midterm elections. Bautista joined the company in June after a career as an FBI official and cryptocurrency analyst. Her role involves overseeing data from both the U.S.-regulated version of Polymarket, which requires real identities, and Polymarket International, where users can trade anonymously using cryptocurrency.

A person familiar with the probes, who was not authorized to speak publicly, stated that at least two of these investigations have been referred to the U.S. Commodity Futures Trading Commission. The CFTC is the federal regulator for these markets. According to Bautista, her team of 16 uses a new election surveillance system to monitor activity. The system ingests gigabytes of data per user from social media, Federal Election Commission records, cryptocurrency firms, banking partners, and statistical models. When a user triggers specific internal red flags, Bautista receives an alert on her phone. She reported that the team currently processes hundreds of such alerts every day.

Bautista emphasized that insider trading is explicitly against Polymarket’s terms of use and the law. She told reporters, "If you have information that you have a duty to protect, don't trade on it." She added that if users believe they can get away with it, the team will find them. While she declined to share specific detection thresholds for security reasons, she explained that the team looks for patterns similar to those found in traditional financial markets. These patterns include opening multiple accounts in short bursts and using consistent device IDs across different trades placed in quick succession.

The investigation into election betting follows a year of rapid growth and legal friction for prediction markets. In April, rival Kalshi banned and fined several political candidates for betting on their own races. Shortly after, reports indicated that campaign staffers made thousands of dollars using insider polling data on platforms like Polymarket and PredictIt. Kalshi launched its own surveillance system in May, which blocks FEC-listed staffers from betting. By July, Kalshi reported blocking dozens of staffers, though one anonymous staffer said they still managed to trade.

Rajiv Sethi, an economics professor at Barnard College, noted that election markets are uniquely vulnerable to manipulation. He explained that these markets can become self-fulfilling prophecies if a candidate is perceived as losing momentum. Bautista said her team is learning from past cases by mimicking the behavior of potential manipulators. She described a scenario where a trader might use new wallets across four or five accounts to move the market. When the team identifies and acts on such a pattern, the findings are fed back into the system to improve future detections.

The CFTC has largely left the task of policing these new financial markets to the companies themselves. This regulatory gap has placed the burden of oversight on platforms like Polymarket and Kalshi. Bautista noted that despite the anonymity offered by cryptocurrency, trades are rarely completely hidden. She stated, "There's never been a case that we work where we haven't been able to identify, potentially, who these people are." The company continues to refine its tools as it prepares for the upcoming election cycle.