P2P.me said it traded on a Polymarket contract tied to its own fundraising round before the raise went live.
Summary
- P2P.me opened Polymarket positions before its fundraising launch and admitted the disclosure delay was wrong.
- The project raised $5.2 million, missed its $6 million target, and the market resolved no.
- US lawmakers and prediction platforms are tightening rules as insider trading concerns spread wider now.
The disclosure adds fresh attention to insider trading risks on prediction markets as US lawmakers and platforms move to tighten rules.
The team behind the decentralized trading platform said it opened positions on Polymarket 10 days before its capital raise launched. The market asked whether the project would reach its $6 million target. At that time, the team said it had only one “oral commitment” from Multicoin Capital for $3 million, with “no signed term sheets” and “no guaranteed allocations.”
The raise later closed at $5.2 million, below the target, and the market resolved to “no.” The team said it understands why some people may see the trade as a trust issue, even though it did not view the bet as trading on a completed deal.
P2P.me said any profits from the positions will go back to its MetaDAO treasury, which serves as the reserve for the DAO that governs the platform. The team also said it is liquidating all open Polymarket positions and putting in place a formal company policy on prediction market trading.
In its statement, the team said,
“Trading on an outcome you can influence erodes trust.” It added that “not disclosing at the time was a mistake we own.”
Those remarks came as the platform moved to address criticism around market conduct and transparency.
Prediction markets face wider policy pressure
The disclosure comes as scrutiny around prediction markets grows in Washington and beyond. On March 25, Representatives Nikki Budzinski and Adrian Smith introduced the PREDICT Act, a bipartisan bill aimed at stopping senior government officials from insider trading on prediction markets.
At the same time, Polymarket and Kalshi have both announced tighter insider trading rules. Polymarket now says users cannot trade on contracts when they hold confidential information or can influence an outcome, while California barred state officials from using insider knowledge to bet on platforms such as Polymarket and Kalshi.
A separate Senate bill would ban event contracts tied to elections, sports, government actions, and military moves.
