Polymarket Faced $10M Stolen-Card Fraud Attempt During U.S. Growth Push

Polymarket US faced an attempted fraud scheme involving at least $10 million in stolen debit-card transactions earlier this year as the prediction-market company pushed to expand its regulated U.S. business.

Fraudsters linked stolen cards to thousands of Polymarket US accounts in February, deposited funds and attempted to move the money through wagers before withdrawing it to cards or accounts they controlled. At one point, payment processor Checkout.com rejected more than 80% of deposits it handled as fraudulent, compared with an industry rate of roughly 1%.

Internal Controls Came Under Pressure

Polymarket initially required withdrawals to return to the same payment source used for deposits, limiting the ability to move stolen-card funds into separate accounts. That safeguard was later relaxed as the company worked to improve the deposit and withdrawal experience.

People familiar with internal discussions described CEO Shayne Coplan as telling employees to continue prioritizing growth and deal with a regulatory fine later if one emerged. Compliance staff had raised concerns after the surge in rejected transactions.

Security problems continued beyond the stolen-card campaign. An engineering issue in July exposed nearly 500 accounts to potential takeover, adding another operational problem as Polymarket expanded its U.S. platform.

The company had already faced scrutiny over its marketing practices. A separate investigation found Polymarket paid creators to promote simulated trades using replicas of its trading interface, prompting a subsequent marketing overhaul.

Polymarket Expands Compliance Team

Polymarket has since added senior compliance, surveillance and risk personnel as its U.S. business scales. Megan McGrath, previously Robinhood’s chief compliance officer, now holds the same role at Polymarket US, while former Nasdaq executive Paul Jordan joined as chief risk officer.

Former FBI official and Coinbase investigator Shana Bautista became global head of investigations and intelligence. Bautista said in August that the company had the resources to investigate suspicious trading as activity builds ahead of the U.S. midterm elections.

Polymarket’s current market-integrity rules prohibit fraud, market manipulation and trading on stolen confidential information. Its U.S. exchange also uses the National Futures Association as a regulatory service provider for market surveillance.

Congress has separately increased scrutiny of prediction-market controls. House Oversight opened an investigation into Polymarket and Kalshi in May, seeking records covering identity verification, suspicious activity referrals, market surveillance and the handling of nonpublic information.