Polymarket loosens anti-money-laundering controls amid $10M fraud
Summary
A Wall Street Journal investigation revealed that Polymarket compromised its anti-money-laundering controls while fraudsters targeted its U.S. platform, resulting in approximately $10 million in stolen debit card deposits. Beginning in February, culprits attempted to deposit funds using stolen cards and then withdraw the proceeds, prompting payment processor Checkout.com to flag over 80% of these transactions as fraudulent. The investigation noted that Polymarket leadership relaxed a critical safeguard requiring funds to be withdrawn to the original payment source, a standard practice in financial institutions to prevent money laundering. Following the incident, the company's chief compliance officer resigned, and the CFTC has since launched an investigation into the attack, directing Polymarket to preserve relevant records.