Fraudsters attempted to steal at least $10 million through the Polymarket platform using stolen debit cards to fund accounts. The attack began in February, when the perpetrators used about seven accounts for more than 4,000 funding attempts. According to payment operator Checkout com, during certain periods, more than 80% of deposits processed on Polymarket US were rejected as fraudulent, whereas the industry average is about 1%. The exact amount of losses remains unknown, as most suspicious deposits did not go through.
Amid the rise in suspicious operations, regular customers experienced delays in payouts. To expedite processing, Polymarket changed its terms to allow withdrawals not only to the payment source from which they were received. This restriction usually complicates withdrawals from stolen cards, and some employees warned that its removal would increase the risks of fraud and money laundering. Management considered other control mechanisms sufficient. Later, the company limited the number of debit cards that could be linked to one account, and by May, the share of fraudulent operations returned to industry average levels. A Polymarket representative stated that the company is cooperating with regulators and law enforcement agencies. A review by the law firm Sullivan & Cromwell showed that the platform complied with regulatory requirements. At the end of July, the platform faced another scheme: perpetrators used stolen personal data to gain access to nearly 500 customer accounts without knowing the owners' logins and passwords. Polymarket promised to compensate for the losses.
Separately, a trader under the pseudonym Beni accused Kalshi of artificially inflating cryptocurrency trading volumes. As an example, he cited the perpetual futures on Ethereum: with an open interest of about $3.1 million, the daily turnover, in his estimation, was approximately $538.6 million. Beni also referred to Kalshi's perpetual contracts incentive program. According to terms registered with the CFTC, for cryptocurrency instruments, the taker fee after rebate is 0.3 basis points, while the maker receives a payout of 0.3 points. The trader suggested that the low aggregate value of trades might encourage artificial turnover. However, the program rules explicitly exclude self-trading, fictitious, and pre-arranged trades from rewards, and Kalshi reserves the right to withhold payments and initiate proceedings if violations are suspected. The head of the platform's cryptocurrency division, under the pseudonym IcoBeast, dismissed the accusations. He stated that the criticism conflates two different products: Artemis data related to prediction markets, whereas the rewards program applies to perpetual futures. There is no such program for cryptocurrency contracts on event outcomes. As of September 21, no public CFTC decisions, audits, or data on specific accounts confirming fictitious trading on Kalshi have been presented. Beni's figures remain his own estimation and do not in themselves prove manipulation.
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