Polymarket faces scrutiny over alleged $10 million stolen-card scheme

The scale of the breach highlights significant challenges for the prediction market as it navigates federal oversight. Internal reports suggest that at the peak of the activity, the rejection rate for deposits was nearly 80 times higher than the industry standard of 1%. Current and former employees claim that concerns regarding these security lapses were escalated to CEO Shayne Coplan, who allegedly pushed for continued growth despite the mounting risks. While the company has not confirmed this account, it maintains that it has since strengthened its compliance procedures.

By May, fraud rates returned to normal levels following the implementation of stricter card-linking limits and the integration of third-party monitoring tools like Riskified. The incident occurred as Polymarket operated under its CFTC-regulated entity, QCX. While the company has not publicly confirmed the total financial loss, the episode has drawn the attention of regulators. Reports indicate that the CFTC is investigating the matter, with staff reportedly instructed to preserve relevant documentation. In response to the broader security pressures, the firm has expanded its investigations team and recently appointed Warren Jenson as its first CFO to oversee long-term financial strategy.