Polymarket, the prediction-market platform that has drawn billions in institutional backing, was the target of an attempted fraud worth approximately $10 million, according to a report by the Wall Street Journal. The newspaper said the attempt occurred as the company pushed its return to the United States market, and that internal compliance staff had warned for months about weak safeguards on the platform.
One unnamed compliance staffer, cited by the Journal, described concerns over "la minceur des garde-fous" — the thinness of the safeguards — governing the platform's operations.
Polymarket settles trades in USDC on the Polygon network through user-controlled wallets, with no central custodian holding funds. Identity verification has long not been required to trade on the platform; know-your-customer checks have applied only to fiat on-ramps. Chaos Labs estimated in late 2024 that roughly one third of displayed trading volume on Polymarket consisted of wash trading.
The platform's oracle system has also drawn scrutiny. In March 2025, a large holder of UMA tokens swayed a vote on a market tied to the US-Ukraine mining deal, imposing a resolution that ran contrary to the facts on the ground.
A history with US regulators
Polymarket's relationship with US authorities has been fraught. The CFTC fined the company $1.4 million in early 2022 for offering unregistered event contracts. In November 2024, the FBI raided the New York home of founder Shayne Coplan. The Department of Justice and the CFTC closed their investigations eight months later without bringing charges.
Since then, Polymarket has moved to formalise its US footprint. It acquired QCEX, a firm holding designated contract market and derivatives clearing organisation licenses, for $112 million, bringing it under CFTC oversight. Intercontinental Exchange, the parent company of the New York Stock Exchange, has invested up to $2 billion in Polymarket and plans to distribute its market data to institutional clients.
Competitor Kalshi, which has operated under CFTC regulation since launch, raised funds in 2025 at sharply higher valuations. Nevada, New Jersey and Ohio have separately issued cease-and-desist orders attempting to block sports-related event contracts offered by prediction markets.
Ahead of the midterms
Polymarket is preparing for what is expected to be its largest-ever trading volume event around November's US midterm elections. The fraud attempt and the compliance warnings reported by the Journal come as the platform seeks to position itself as a mainstream, regulated venue for political and financial speculation, with institutional partners such as ICE betting on that transition.
