Polymarket, a U.S. prediction market platform, reported that at least $2.6 million (approximately 3.5 billion won) was stolen from user accounts due to a hacking incident, according to the Wall Street Journal on October 29.
The breach resulted in the theft of funds from over 700 user accounts. Polymarket identified a security compromise at a third-party vendor as the cause and announced plans to fully compensate affected users.
According to the WSJ, hackers accessed funds from more than 700 Polymarket accounts. CNBC also reported that users began alerting others on social media about unauthorized withdrawals occurring that afternoon.
In response, Polymarket temporarily suspended trading on its international platform to conduct a security review. Trading resumed around 3 p.m. Eastern Time after the issues were addressed.
The incident was traced back to a security breach at DebugBear, a website performance monitoring vendor that helps operators analyze visitor access speeds and user environments. Hackers reportedly spread malware through this vendor's services, allowing them to access Polymarket users' funds.
Analysis from betting intelligence and blockchain data firms estimated that at least $2.7 million (approximately 3.7 billion won) was withdrawn from a total of 710 wallets. However, this figure differs from the number of affected accounts and the amount reported by the WSJ due to varying analysis criteria.
Polymarket has committed to fully compensating users who suffered losses in this incident. The company has also reported the matter to law enforcement authorities in the UK, where DebugBear is based. However, it was noted that the U.S.-specific platform was not affected by this breach.
Polymarket allows users to predict outcomes of various events in politics, economics, and sports, placing bets in a yes-or-no format. For example, users can wager on whether a specific candidate will win an election or which team will win a sports match. If their predictions are correct, they earn profits based on the contracts; if incorrect, they lose their invested amount.
The international platform operates as a decentralized finance (DeFi) service based on blockchain and virtual assets, while the U.S. platform is a regulated exchange operating separately. Due to the different operational structures, the hacking incident appears to be limited to the international platform.
Polymarket has faced similar security incidents this year. In June, user funds were compromised due to a security breach related to a third-party vendor, prompting compensation measures. Reports also indicated incidents of fraud involving stolen debit cards and account takeovers on the U.S. platform this year.
As betting on various outcomes, from sports events to election results, gains popularity, regulatory debates surrounding prediction markets are intensifying. State governments, federal lawmakers, and the casino industry are questioning whether prediction markets fall under financial derivatives or constitute illegal gambling.
Polymarket and its main competitor, Kalshi, are embroiled in numerous lawsuits regarding the legal nature of prediction market products and regulatory authority. Polymarket is also exploring business expansion, including discussions with investors about a potential initial public offering (IPO) next year.
* This article has been translated by AI.
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