Polymarket has investigated dozens of bets connected to the November 3 midterm elections, according to Shana Bautista, the prediction market’s head of global intelligence and investigations. At least two of the cases have been referred to the U.S. Commodity Futures Trading Commission, a person familiar with the probes said. The investigations come as Polymarket and rival Kalshi have rapidly expanded, while drawing legal challenges from states and criticism from lawmakers concerned that wagers on elections could threaten public confidence in the democratic process. Bautista, a former FBI official who joined Polymarket in June, oversees a 16-person team and a new system designed to flag suspicious trading. She said the system combines information from Federal Election Commission records, social media, cryptocurrency and banking partners, statistical models and other public sources. It generates hundreds of alerts each day, she said. The company operates a U.S.-regulated platform that requires users to verify their identities, as well as a larger international service where people can trade anonymously using cryptocurrency. Bautista said investigators have been able to identify potential suspects in the cases her team has handled, despite the use of crypto and pseudonymous accounts. “If you have information that you have a duty to protect, don’t trade on it,” Bautista said, adding that such activity violates the company’s terms and may also break the law. Prediction-market trades can be vulnerable to manipulation when traders use confidential campaign information or create multiple accounts to distort apparent odds. Rajiv Sethi, an economics professor at Barnard College who studies prediction markets, has warned that election markets may influence the events they claim only to forecast: perceptions that a candidate is losing momentum could affect voter behavior or a campaign’s prospects. Kalshi has also introduced election-trading surveillance and said it blocked dozens of campaign staffers from betting on races. But a campaign staffer previously told reporters they had found a way around the platform’s restrictions. The investigations put the spotlight on a central question for the fast-growing industry: whether private platforms can police election betting effectively, particularly as federal oversight remains limited and one major version of Polymarket operates outside U.S. regulation.