Polymarket faced $10 million fraud attempt as its CEO pushed growth over compliance concerns: WSJ
In a separate attack, hackers compromised nearly 500 users' accounts using stolen personal information, according to the report.
Polymarket, a prediction-market operator, is facing mounting fraud concerns as the company prepares for a potential IPO, according to the Wall Street Journal. Earlier this year, the company suffered a major fraud attack on its U.S. platform, with fraudsters linked stolen debit cards to thousands of accounts and attempting to steal at least $10 million.
Fraud rates remained elevated for months, with payment processor Checkout.com rejecting over 80% of deposits it handled as fraudulent, compared to industry rates of roughly 1%. However, Polymarket took steps to address the issue, restricting the number of debit cards users could connect and hiring Riskified as an antifraud contractor.
The company also faced another attack in July, affecting nearly 500 users, which an engineering flaw reportedly allowed attackers to access existing accounts and linked payment methods. Polymarket stated it would cover lost funds, and the CFTC is currently investigating the company. The firm has since strengthened its risk-management and compliance teams and protocols as it considers an IPO, recently hiring former Amazon finance chief Warren Jenson as its first CFO.
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