Polymarket is under fresh scrutiny after a Wall Street Journal report on how it handled a $10 million stolen-card fraud attempt on its US platform, adding to a CFTC investigation reported in June.
In late September, The Wall Street Journal reported that Polymarket is drawing scrutiny for its response to the fraud scheme on its US platform. Citing current and former employees, the report described internal compliance concerns as the company pursued rapid growth. Polymarket said it is "committed to fair and transparent markets and cooperation with regulators."
Let’s dive deeper and see what we can learn from it.
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February Fraud
In February 2026, Polymarket was hit by fraud when fraudsters linked stolen debit cards to thousands of accounts on the platform. They deposited funds, placed trades and then tried to withdraw the winnings to accounts they controlled.
Checkout.com, the payment system responsible for Polymarket’s US debit card transfers, flagged this activity and began rejecting deposits. At the peak, it rejected more than 80% of the Polymarket US deposits it handled as fraudulent, against an industry norm of roughly 1%.
This led to attempted fraud totaling at least $10 million. Although the actual figure depends on what fraudsters attempted to withdraw rather than confirmed losses, the attempted fraud totaled at least $10 million. That figure reflects what the attackers tried to withdraw, not confirmed losses, and a person cited by the WSJ said most attempted deposits failed.
According to the WSJ, around seven users were responsible for most of the activity, and one reportedly attempted around 4,000 separate deposits.
Compliance Concerns Raised by Employees
According to the WSJ, employees raised concerns that Polymarket's controls were not keeping pace with its growth.
When compliance staff raised concerns with CEO Shayne Coplan, he reportedly told them to "focus on growth now, and worry about any regulatory fines later," according to people cited by the WSJ.
The WSJ also reported that Polymarket dropped a common anti-money-laundering safeguard requiring funds to be withdrawn to the same payment source they were deposited from. Employees warned that the change raised money-laundering risk.
Separately, CNBC and the WSJ reported in June that the CFTC is investigating Polymarket's marketing, including creator videos that allegedly showed staged wins. The CFTC has not publicly confirmed the probe, and Polymarket said it is auditing its promotional content.
The WSJ also reported a July account-takeover attack affecting nearly 500 users. Lawmakers have separately questioned suspicious trades on the platform, while Polymarket says its April 2026 referral led the DOJ and CFTC to bring the first US prediction-market insider-trading charges.
Polymarket also faces more than a dozen state cases questioning whether prediction markets amount to unlicensed gambling, along with around two dozen lawsuits from traders.
Conclusion
Polymarket returned to the US through its $112 million purchase of the CFTC-licensed exchange QCX in July 2025, then launched its US app in December 2025.
By May 2026, it had limited the number of debit cards each user could link, added experienced risk-management staff and improved its compliance procedures.
Traders should check any prediction market's regulatory status, security record and history before opening an account.
In the meantime, you can review the
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