Over $600 Million In Polymarket Election Trades Took Place After Races Ended
An anonymous reader quotes a report from Wired: Prediction market boosters often tout the platforms as barometers of public opinion, or even "truth machines" offering a clearer picture of where things are headed than polling or other data. In 2024, for example, Kalshi beat many pollsters in forecasting the outcome of the US presidential race. But their trading activity can also tell more…
Over $600 million in trading occurred on Polymarket's global election markets after races concluded, according to a report from Wired. This figure far surpasses the typical trading volume seen in political markets. Most of the activity centered around long-shot candidates who did not ultimately win. The investigation revealed particularly suspicious trading in Ethiopia and Romania, where researchers found $284 million in questionable trades.
In Ethiopia, 99.6% of the trading volume was flagged as suspected wash trading, a form of market manipulation where accounts repeatedly buy and sell assets to create the illusion of heavy trading activity. Wash trading can also be used to artificially inflate trading activity and qualify for cryptocurrency token rewards, a practice known as activity farming.
Polymarket reportedly immediately flagged and blocked the suspicious accounts in Ethiopia, but did not explain why the activity was permitted to persist for months prior to intervention.
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