Key Takeaways Criminal actors attempted to siphon at least $10 million from Polymarket US through stolen debit cards during February. Payment processor Checkout.com flagged over 80% of deposi
Polymarket encountered a significant fraud operation worth no less than $10 million during early 2025, with criminals exploiting stolen debit cards on the company’s U.S. prediction markets platform, a Wall Street Journal investigation revealed.
WSJ: Polymarket CEO Reportedly Told Staff to Keep Growing and Pay a Fine if Regulators Found Out Amid $10M Stolen-Card Fraud Attempt
The Wall Street Journal reported that fraudsters linked stolen debit cards to Polymarket US accounts in February, attempting to move at least $10… pic.twitter.com/hbBJEJF3Fi
— Wu Blockchain (@WuBlockchain) September 20, 2026
The fraudulent activity commenced in February, coinciding with Polymarket US expanding access to additional users.
Criminal operators reportedly connected stolen payment cards to platform accounts, executed bets, and attempted to transfer funds to alternative cards or accounts under their control.
During peak fraudulent activity, Checkout.com, the platform’s payment processor, identified more than 80% of deposit attempts as fraudulent—dramatically higher than the typical industry benchmark of approximately 1%, the investigation found.
The majority of fraudulent deposit attempts were unsuccessful, according to reports.
Sources with knowledge of the incident indicated that roughly seven user accounts were responsible for the bulk of suspicious activity, with a single account making approximately 4,000 deposit attempts.
The exact amount successfully stolen from the attempted $10 million remains unclear, according to the Journal’s findings.
Staff members reportedly expressed concerns about the security breach to CEO Shayne Coplan.
According to individuals briefed on internal conversations, Coplan instructed employees to maintain their emphasis on platform expansion and address regulatory issues as they arose. The company has publicly stated its dedication to market integrity and collaboration with regulatory bodies and law enforcement agencies.
The security incident also caused withdrawal processing delays as compliance teams managed the surge in questionable transactions.
Polymarket’s management subsequently eliminated a policy that required users to withdraw funds through the same payment method used for deposits.
Multiple staff members cautioned that dropping this protection could elevate money-laundering vulnerabilities, the report indicated.
Polymarket subsequently deployed more robust security mechanisms.
Fraud rates had normalized to industry standards by May, according to sources with operational knowledge.
New safeguards included restrictions on the number of debit cards linkable to individual accounts and partnership with fraud prevention specialist Riskified.
Multiple senior personnel departed during this timeframe.
Andrew Clifford, Polymarket US Chief Compliance Officer, resigned in April following submission of a report detailing fraud-related concerns.
The company terminated U.S. CEO Justin Hertzberg’s employment, while key regulatory and anti-money-laundering executives also exited.
An independent assessment conducted by Sullivan & Cromwell law firm determined that Polymarket maintained regulatory compliance, according to individuals aware of the conclusions.
Polymarket experienced an additional security breach in July affecting nearly 500 users through an account registration vulnerability.
Attackers leveraging stolen personal data could reportedly access existing accounts and associated payment methods without legitimate credentials. Polymarket committed to reimbursing affected users for any losses.
These security challenges emerge as Polymarket pursues approximately $1 billion in new investment at roughly $21 billion valuation.
1789 Capital is providing about $300 million in the current round, supplementing an earlier investment of approximately $200 million, according to reports from the Journal and The Block.
Coplan has also initiated discussions regarding potential 2027 initial public offering plans and recruited former Amazon finance chief Warren Jenson as the company’s inaugural CFO.
Polymarket maintains it has enhanced risk management frameworks, compliance infrastructure, product verification processes, and executive leadership as it scales operations.
The post Polymarket Hit by $10M Fraud Scheme Amid Rising Compliance Scrutiny appeared first on Blockonomi.
