Key Takeaways
Fraudsters tried to steal at least $10 million through Polymarket's US platform in February using stolen debit cards, and processor Checkout.com at one point rejected more than 80 percent of deposits as fraudulent, against a roughly 1 percent industry norm, according to a Wall Street Journal investigation published Saturday.
CEO Shayne Coplan reportedly told staff to focus on growth and deal with regulatory fines later. Polymarket's US compliance chief resigned, its US CEO was fired, and the CFTC is investigating.
The scrutiny arrives as Polymarket raises about $1 billion at a roughly $21 billion valuation, with Donald Trump Jr.'s 1789 Capital contributing around $300 million.
Polymarket, the crypto prediction market founded by Shayne Coplan, faced an attempted theft of at least $10 million through stolen debit cards earlier this year while its chief executive urged employees to keep growing and worry about compliance later, according to a Wall Street Journal investigation published on Saturday.
The attack began in February, months after the regulated US platform started admitting users off its waitlist. Fraudsters used stolen cards to fund accounts, place bets, and try to withdraw the winnings to accounts they controlled. Polymarket's payment processor, Checkout.com, flagged the surge and at one point rejected more than 80 percent of the US deposits it handled, compared with the roughly 1 percent that is standard across the industry. The Journal reported that Polymarket later dropped a safeguard requiring funds to be withdrawn to the same source they came from, a rule that helps block exactly this kind of laundering.
The fallout reached the leadership. US compliance chief Andrew Clifford resigned in April after flagging the fraud in a report to executives, and the company fired US CEO Justin Hertzberg along with its heads of US regulation and anti-money-laundering. A separate July breach exposed nearly 500 user accounts through a registration flaw. An internal review by law firm Sullivan and Cromwell concluded Polymarket had complied with regulations, and the company says fraud rates returned to normal by May after it tightened controls.
The Commodity Futures Trading Commission is investigating, and Coinbase was reportedly subpoenaed for customer data tied to the probe. It is the same agency WYDE has tracked as it reshapes crypto oversight, from its new posture toward DeFi and wallet developers to the enforcement precedent set by the FTX consent orders. The timing is awkward, landing as Polymarket raises about $1 billion at a $21 billion valuation, with Donald Trump Jr.'s 1789 Capital adding roughly $300 million.
People Also Ask
Why is the CFTC investigating Polymarket?
The Commodity Futures Trading Commission is examining Polymarket's marketing, consumer protection, and compliance practices, including its response to a $10 million fraud attempt disclosed by the Wall Street Journal. Employees have been told to preserve records tied to the attack.
How big was the Polymarket fraud attempt?
Fraudsters tried to steal at least $10 million using stolen debit cards starting in February 2026. Most attempted deposits failed, and about seven users drove the bulk of the activity, with one reportedly making around 4,000 deposit attempts.
Did Polymarket break the law?
An internal review by Sullivan and Cromwell concluded the company complied with regulations, and Polymarket says it has strengthened its infrastructure and leadership. The CFTC inquiry is ongoing and no charges have been announced.
Who is funding Polymarket's $21 billion valuation?
Polymarket is raising about $1 billion at a roughly $21 billion valuation. Donald Trump Jr.'s 1789 Capital is contributing around $300 million on top of about $200 million invested earlier, and the firm recently hired former Amazon finance chief Warren Jenson as CFO.