Polymarket's US platform got farmed for at least $10 million in February 2026 — bad actors linked stolen debit cards to accounts, placed bets, then tried to cash out to clean accounts or separate cards they controlled. Payment processor Checkout.com's fraud system lit up and started rejecting deposits. Per a Wall Street Journal report, when staff brought the mess to CEO Shayne Coplan, his answer was to chase growth — the firm could just pay a fine if regulators ever came.
▪️ One single account made roughly 4,000 separate deposit attempts before anyone at Polymarket moved.
▪️ Checkout.com's automation fired: at peak it rejected over 80% of processed deposits as fraud. Industry norm is around 1%.
▪️ Staff flagged it to CEO Shayne Coplan. His call: chase growth, pay a fine if regulators come. Execs scrapped the rule that withdrawals go back to the same payment source.
▪️ Fallout: compliance chief Andrew Clifford quit in April after a memo on the gaps. Polymarket US CEO Justin Hertzberg was fired. Heads of US regulation and AML left.
▪️ June: hackers used a third-party vendor to inject malicious code into the site, hitting user balances. Polymarket reimbursed those users.
▪️ July: a registration flaw let attackers armed with stolen personal data walk into nearly 500 accounts with no password.
📊 Funding round:
$1B at $21B valuation📊 1789 Capital commitment:
$300M📊 States suing over unlicensed gambling:
more than a dozenIf you've got money parked on Polymarket, here's your read: the CFTC is investigating and told staff to preserve records on the fraud and the internal compliance handling, the NYC Council is poking at the marketing, and lawsuits in more than a dozen states call the whole thing unlicensed gambling. The actual fix — capping how many debit cards one account can attach — landed in May, after the damage was done, and fraud dropped back to industry average. Sullivan & Cromwell, hired by the company itself, concluded it complied. Meanwhile they're staffing up with ex-FBI investigator Shauna Batista, ex-Amazon CFO Warren Jenson and ex-Uber exec Travis Vanderzanden as chief growth officer, and laying the groundwork for an IPO. Compliance here is a line item, not a culture.
💬 «Our market integrity framework includes processes to detect, review, and respond to suspicious activity. Polymarket remains committed to maintaining accurate, fair, and transparent markets while cooperating fully with regulators and law enforcement.» — Polymarket spokesperson
🔮 The fine is already priced in. Question is whether the CFTC writes one big enough to hurt before the IPO prints.
@pixeos
