Polymarket Accused of Ignoring Fraud in Pursuit of Growth

Polymarket, a leading prediction market company, has been accused of ignoring fraud in its pursuit of growth, according to a recent report by The Wall Street Journal. The article cites interviews with current and former employees and investors, revealing that a processing company uncovered a $10 million attempted fraud scheme while handling Polymarket’s U.S. betting platform.

The company was rejecting 80% of transactions as fraudulent, far exceeding the industry standard of 1%. The Commodity Futures Trading Commission (CFTC) is currently investigating Polymarket, and employees have been instructed to retain records related to the fraud incident and other matters. Polymarket's CEO, Shayne Coplan, reportedly responded to the issue by insisting on continued growth, even if it meant facing fines from regulators.

Current and former employees claim that this response aligns with Coplan's overall strategy of growth at all costs. Former financial regulators interviewed by the WSJ found the level of attempted fraud and Polymarket's response to be unusual for the commodities and gambling industries. Former CFTC enforcement lawyer Joe Konizeski stated, "In the regulated space, this kind of thing does not happen."

A Polymarket spokesperson emphasized the company's commitment to accuracy, fairness, and transparency, as well as its cooperation with regulators and law enforcement. The company has hired Shauna Batista, a former FBI agent, to head its investigation team. Polymarket is also facing legal challenges from the New York City Attorney's Office, which is investigating its advertising practices, and more than a dozen states are probing whether the company and its competitors like Kalshi and Coinbase are operating unlicensed gambling platforms.