Prediction-market operator Polymarket confronted an alleged scheme in which fraudsters used stolen debit cards to attempt moving at least $10 million through its U.S. platform beginning in February. Payment data showed rejection rates exceeding 80 percent at the height of the activity, far above typical industry levels near 1 percent.

Criminals connected the stolen cards to thousands of Polymarket US accounts, funded them, placed wagers and sought to withdraw funds to cards or accounts under their control. The payment processor Checkout.com flagged the bulk of those deposits as fraudulent during the peak period.

Internal Concerns and Leadership Response

Compliance staff escalated the surge in rejected transactions to CEO Shayne Coplan. According to accounts from people familiar with the discussions, Coplan directed the team to continue focusing on growth and treat any eventual regulatory penalty as a manageable expense rather than an immediate reason to slow operations or tighten controls.

Polymarket has not publicly confirmed the remark. A company spokesperson stated that the platform maintains procedures to detect and respond to suspicious activity and remains committed to cooperating with regulators and law enforcement.

Early safeguards required some withdrawals to return to the same payment source used for deposits. That restriction was later eased to improve the experience for legitimate users, a change that raised financial-crime concerns among some staff.

Remediation Steps and Timeline

Elevated fraud rates persisted for several months after the February peak. By May the figures had moved closer to industry norms after Polymarket limited the number of debit cards that could be linked to a single account and engaged Riskified as an external antifraud provider.

The $10 million figure represents the amount the fraudsters allegedly attempted to move, not a confirmed net loss to customers or the company. Public details on the precise sum successfully withdrawn remain limited.

Additional Security Incidents

A separate episode in July affected nearly 500 users. Attackers exploited an engineering weakness and stolen personal information to access existing accounts and linked payment methods. Polymarket indicated it would cover the associated losses.

In June the company confirmed that a compromised third-party vendor had injected malicious code into its frontend for some users. Investigators later estimated related losses at roughly $3.1 million across a limited number of wallets. Polymarket said it removed the affected dependency, contained the incident and would reimburse affected customers.

Regulatory Context and Company Response

Polymarket US operates through QCX LLC, a designated contract market under Commodity Futures Trading Commission oversight. The structure differs from the company’s earlier position. In 2022 Polymarket paid a $1.4 million civil penalty and agreed to wind down noncompliant event markets after the CFTC found it had offered binary options without proper registration.

The CFTC is examining matters connected with the platform, and employees received instructions to preserve documents related to the February fraud activity and other issues. Separately, the House Committee on Oversight and Government Reform requested records in May concerning identity verification, suspicious-activity referrals and geographic restrictions.

Since the payment-card episode Polymarket has expanded its internal capabilities. It appointed Shana Bautista, a former FBI investigator, as global head of investigations and intelligence. On September 10 the company named Warren Jenson, who previously held senior finance roles at Amazon and other large firms, as its first chief financial officer to oversee finance, capital strategy and long-range planning.

Polymarket’s market-integrity disclosures state that the company has referred more than 90 accounts to law enforcement and provided authorities with information involving more than 315 wallets. Federal prosecutors have publicly noted cooperation in at least one unrelated insider-trading case involving classified information.

Capital Raising Backdrop

The disclosures arrive as Polymarket seeks approximately $1 billion in new funding at a valuation near $21 billion. Intercontinental Exchange, parent of the New York Stock Exchange, has made substantial prior investments, including an additional $600 million cash commitment earlier this year. Donald Trump Jr.’s 1789 Capital is also among existing backers.

The company has not announced an IPO timetable, though it continues to prepare operational and financial infrastructure consistent with eventual public-market readiness. Polymarket maintains that its fraud controls have been strengthened and that it continues to work with law enforcement on suspicious activity.