Polymarket CEO ignored $10 million fraud: 'Just pay a fine'

The CEO of prediction platform Polymarket, Shayne Coplan, is said to have told his employees to ignore a large-scale fraud attempt of at least $10 million and simply pay a fine to any regulators. That is reported by the Wall Street Journal based on conversations with current and former employees. The statements are said to have been made after fraudsters linked stolen payment cards to Polymarket accounts in the US in February.

In brief:

• Fraudsters tried to siphon off at least $10 million through Polymarket using stolen payment cards.
• CEO Shayne Coplan is said to have told employees to ignore the fraud and pay a fine if it were discovered.
• Former regulators from the CFTC and the Department of Justice call Polymarket’s response atypical for the sector.

Stolen payment cards and an 80% fraud rate

In February, Polymarket received an alarming signal from the company that processed card payments for the US platform. Fraudsters had linked stolen payment cards to accounts and then tried to move money to their own accounts through bets. The estimated amount involved was at least $10 million.

At one point the payment processor rejected more than 80% of all transactions as suspicious. That stands in sharp contrast to the usual norm in the sector, which is around 1%. Employees brought the matter to the immediate attention of CEO Shayne Coplan.

CEO: ‘Keep growing and pay a fine if regulators find out’

Coplan’s response made a deep impression on the compliance team. According to people familiar with the events, he is said to have stated that Polymarket simply had to keep growing and, if regulators ever got wind of it, should simply pay a fine.

Current and former employees describe this attitude as characteristic of Coplan’s strategy: growth at any cost. The fraud rate remained elevated for months after the incident, although it no longer reached 80%. Following the case, executives left and an internal investigation was launched.

Regulators and Polymarket respond

Former officials from the CFTC, the Department of Justice and the tax authority told the newspaper that both the scale of the fraud attempts and the response to them are atypical for commodities trading and the gambling sector. Polymarket is more vulnerable to fraud than traditional exchanges because the platform accepts money directly from private users.

In a response, Polymarket says that it has procedures to detect and investigate suspicious activity, and that it is prepared to cooperate with regulators and law enforcement agencies.