Polymarket hit by $10M fraud scheme using stolen debit cards
In brief
- Polymarket faced $10M fraud attempt in February using stolen debit cards and fake accounts
- Checkout.com rejected over 80% of Polymarket deposits during fraud peak due to suspicious activity
- Additional security breaches in June and July exposed user account and fund vulnerabilities
The February Fraud Wave
Fraudsters attached stolen cards to thousands of Polymarket US accounts and attempted to convert them into wagers. The attack was systematic and large in scope. At the peak, payment processor Checkout.com was rejecting more than 80% of Polymarket deposits due to the suspicious activity flooding the system.
Internal tensions surfaced during the crisis. CEO Shayne Coplan continued to emphasize growth despite warnings from compliance staff about the fraud. Fraud levels remained elevated for several months after the February spike, straining the platform's ability to operate normally.
Polymarket responded by tightening controls. The company introduced tighter restrictions on the number of debit cards users could attach to accounts. This followed an earlier policy requiring users to withdraw funds back to the same payment source used to make a deposit, though this restriction was later loosened.
Security Incidents Compound the Crisis
The fraud wasn't an isolated incident. In June, Polymarket confirmed that hackers had stolen funds from some users after a compromise involving a third-party vendor. Malicious code was injected into the company's website for certain users during the breach, allowing attackers to intercept sensitive data and credentials.
The problems persisted. In July, an engineering vulnerability allegedly allowed attackers with stolen personal information to access existing accounts, affecting nearly 500 users.
Leadership Overhaul
Polymarket has begun rebuilding its operational and financial infrastructure. Earlier this month, the company appointed veteran executive Warren Jenson as its first chief financial officer. Jenson previously served as CFO at Amazon, Electronic Arts, Delta Air Lines and Nielsen, bringing deep experience in scaling operations and managing risk at large enterprises.
Polymarket has also brought in former Uber executive Travis VanderZanden as chief growth officer. The executive hires signal an effort to separate growth initiatives from compliance and security operations—a structural lesson from the February crisis.
