Popular event betting platforms such as Polymarket and Kalshi have been hit by unprecedented levels of financial fraud. Criminals have begun to actively use prediction markets to launder money and withdraw funds from stolen bank cards.
Popular event betting platforms such as Polymarket and Kalshi have been hit by unprecedented levels of financial fraud. Criminals have begun to actively use prediction markets to launder money and withdraw funds from stolen bank cards.
This was reported by The Wall Street Journal, citing a report from a payment processing company that collaborated with Polymarket.
The fraud was uncovered after the payment operator recorded an abnormal increase in the number of bets made using stolen debit cards. The fraudsters entered other people's payment details on the platform, placed bets, and in case of winning, withdrew the "clean" funds to their own accounts in alternative payment systems.
In total, the criminals attempted to transfer at least $10 million through this scheme. As a result, the third-party payment provider was forced to reject over 80% of incoming transactions as fraudulent, although the industry standard is around 1%.
Despite warnings from the compliance team, Polymarket CEO Shane Coplan effectively urged employees to continue working and ignore the risks, dealing with the consequences only if they arise.
Financial regulation experts say this level of regulatory disregard is unacceptable for the fintech sector.
"This kind of thing doesn't happen in a regulated environment. There are adults who handle client funds and make sure they come from the right sources and are used properly," said Joe Konizeski, a former lawyer for the Commodity Futures Trading Commission (CFTC).
Recall that in November 2025 , there were about 100 active bets on the Russian-Ukrainian war on Polymarket — such as whether the Russians would capture Pokrovsk by the end of the year, or when a ceasefire would occur. According to Forbes Ukraine, there were 97 active bets in November for a total of $96.8 million. The largest number of bets ($27 million) was placed on a bet on a ceasefire by the end of 2025, which has about a 5% probability.
The Institute for the Study of War (ISW) later found itself at the center of a scandal over a change to its map of the war in Ukraine, which became the basis for betting on the Polymarke platform . The incident, which occurred in November, forced ISW to admit to interference that could have affected the financial results of betting on the market.
Also, the developers of the PolyGlobe map, which visualizes bets from Polymarket with a link to geolocations, unauthorizedly used the API of the Ukrainian OSINT project DeepState . Thus, they wanted to improve the visualization of bets on the capture of Ukrainian cities by the Russians.
