Polymarket hired an ex-FBI staffer who built in-house on-chain surveillance, CEO Shayne Coplan told the CFTC Innovation Advisory Committee, and the platform says it has handed over 315+ wallet records, 90+ account referrals and helped lead to two prosecutions this year (one trader made about $404,000 and another about $1.2M). The company has tightened KYC, banned VPNs, blocked access from 39 countries and was cut off in South Korea in August, underscoring security and regulatory risks for crypto prediction markets and the erosion of on-chain anonymity.

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In Brief

Coplan says an ex-FBI staffer built Polymarket's own on-chain surveillance software
Polymarket reports 90 plus account referrals and 315 plus wallet handovers
Two traders were charged this year after leaving public trails on chain

Polymarket pays a former FBI staffer to watch its traders full time. Chief executive Shayne Coplan revealed the role to US regulators on Thursday.

He spoke at the first meeting of the Commodity Futures Trading Commission’s Innovation Advisory Committee. His message was blunt. Polymarket users have almost no privacy.

Polymarket Surveillance Goes Further Than the Company Says

Coplan described the hire while defending his platform in Washington.

“We have someone here right now who… is ex-FBI who works full-time at Polymarket.”

That staffer built custom surveillance software in-house, he said. Outside firms were impressed it was not outsourced.

The detail is new. Polymarket’s public integrity page names Chainalysis and Palantir as partners. It never mentions building tools of its own.

Coplan knew the news would sting. He said some users would be upset to hear it.

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The Numbers Behind the Monitoring

Polymarket reports handing 315 or more wallet records to authorities. It also claims 90 or more account referrals and two arrests. The company gives no date for those totals.

Two traders learned what that means this year. In April, the CFTC charged Army Master Sgt. Gannon Ken Van Dyke over the Nicolas Maduro market.

He bought more than 436,000 “Yes” shares in four days. He made roughly $404,000. His handle, Burdensome-Mix, sat in public view the whole time.

In May, regulators charged Google engineer Michele Spagnuolo over 23 contracts on the firm’s Year in Search list. He allegedly cleared about $1.2 million as AlphaRaccoon.

Why Anonymity Was Never Real

Coplan argues the openness is the point.

“It’s all public. It’s all on chain. It’s the least anonymous financial market of all time.”

Anyone can open a market and read a trader’s full history. Therefore the tool that catches cheats also exposes everyone else.

The walls are rising elsewhere too. Polymarket bars 39 countries and bans VPNs outright under its terms. It began blocking VPN access and demanding documents from big accounts this year. South Korea cut access entirely in August.

Not everyone thinks self-policing works. CME Group chief Terry Duffy told the same meeting that regulators wave through manipulable contracts. Chairman Michael Selig rejected that.

For traders, the lesson is simpler. A Polymarket wallet is not a disguise. It is a permanent record, and a former FBI staffer is reading it.

Read the article at BeInCrypto