According to Bloomberg and The Crypto Times, blockchain-based prediction markets platform Polymarket is pursuing a fresh funding round at a $20 billion+ valuation, representing a significant increase from its previous funding round. The company previously closed a funding round at a $15 billion valuation in April 2026, which included a $600 million investment from the Intercontinental Exchange, the owner of the New York Stock Exchange. As reported by Bloomberg, the new reported valuation of $20 billion+ represents a more than 33% increase in just a few months, reflecting growing investor confidence in the prediction market sector. The fundraising talks are reportedly at an early stage, with the company seeking to raise approximately $1 billion to more than double its $9 billion valuation from October 2025. The potential funding round signaling a major milestone for the prediction market industry and marking a significant development in the evolution of prediction markets.
A comprehensive study by researchers from Stanford University and Singapore Management University has exposed widespread settlement manipulation on Polymarket's crypto markets. The research examined approximately two months of five-minute bitcoin contracts and found that 821 accounts made $8.2 million in settlement windows they classified as likely manipulated. The study revealed that 93% of losses in manipulated windows fell on retail traders, while excluding market makers, with the researchers noting that "a bet the market treated as near-certain was overturned one time in three." The vulnerability stems from the structural design where asset-price contracts settle on financial prices that can be manipulated through trading the underlying market itself. The researchers found patterns of unusually large orders on Binance in final settlement seconds, followed by rapid price reversals in bitcoin, demonstrating how traders could accumulate large positions on Polymarket and move prices on Binance during settlement windows to force favorable market resolutions.
Following the fraud study findings, Polymarket has implemented comprehensive changes to its pricing mechanisms. The company has replaced single-price snapshots with time-weighted average prices (TWAP) for short-dated crypto markets, addressing the structural vulnerabilities identified in the research. Five-minute markets now use a 30-second average, while 15-minute and four-hour markets employ a 60-second average. The new system utilizes Chainlink Data Streams to deliver pricing data, mirroring safeguards used by rival platform Kalshi. As part of the transition, Polymarket has introduced a $1 million liquidity incentive program to support market activity through August 2026. The platform stated that "to protect market integrity in our crypto up/down markets, we're updating how these markets resolve," emphasizing its commitment to addressing the manipulation concerns that had been raised by onchain analysts since May 2025.
According to Bloomberg, Polymarket's return to the U.S. market provides a regulated growth channel alongside its international platform, which uses crypto settlement. The CFTC's official registry lists QCX LLC, doing business as Polymarket US, as a designated contract market with the designation date of July 9, 2025. The company's U.S. access page indicates its app is being rolled out to users from a waitlist, suggesting access may still be expanding in stages. Bloomberg's sources reported that Polymarket's annualized revenue had more than tripled since April to above $1.2 billion, with the platform generating a record $50.6 billion in July volume alongside Kalshi's $37.7 billion. Polymarket US increased its volume by 54% to $5 billion, while the international venue fell 26% to $7.9 billion, showing faster U.S. growth but uneven expansion across platforms.
The fraud study has intensified competition in the prediction market sector, with rival platforms implementing different safety measures. Kalshi developer IcoBeast.eth noted that "this problem doesn't exist on Kalshi fwiw," while Tomdnc responded that "it literally does happen on Kalshi." Kalshi spokesperson confirmed that while offshore markets can affect prices, its 60-second moving average based on regulated exchanges makes brief attempts to move prices significantly harder and more expensive than platforms using instant snapshots. Kalshi has conducted 150 to 250 material investigations per quarter and made about 40 to 50 referrals to the Commodity Futures Trading Commission so far this year. The platform's identity-verified traders and regulated price indexes provide additional safeguards against manipulation, though concerns about resolution vulnerabilities persist across the prediction market industry.
