Polymarket confirms user funds stolen in third-party breach

On Thursday, prediction market platform Polymarket confirmed that hackers stole users’ funds following a security incident involving a third-party vendor. In a statement published on the social media platform X, the company explained that a compromise at a third-party vendor allowed hackers to inject malicious code into its website “for some users”. Polymarket stated that it has “contained” the incident, is actively contacting the affected individuals, and is “refunding them in full”. When contacted, Polymarket spokesperson Connor Brandi confirmed that the breach led to users’ funds being stolen, though the company declined to provide additional details or answer specific questions regarding the event.

The full scale of the exploit became clearer as external blockchain security firms published their findings. Around the same time as Polymarket’s announcement, blockchain monitoring firm PeckShield reported on X that a phishing campaign was targeting Polymarket users. According to PeckShield’s analysis, hackers had stolen around $3 million worth of cryptocurrency during the campaign. A separate blockchain analyst also reported similar losses, stating that the funds were stolen from more than 11 victims. Polymarket, which offers users the possibility of being paid in cryptocurrency, has not yet specified the exact number of users who lost funds during the breach. The incident highlights the ongoing security risks faced by prediction platforms, where web-based frontends often serve as entry points for malicious actors targeting user wallets.

The security breach caps off a highly challenging week for the platform, which was already dealing with the fallout from an investigation into its marketing practices. On Sunday, an investigation revealed that Polymarket paid online creators to post deceptive videos showing they won lucrative bets that were actually fake. In response to the investigation, the company said it would audit its promotional content. The revelation of these deceptive videos had already drawn significant scrutiny to the platform’s promotional strategies before the third-party vendor compromise occurred. Together, these back-to-back incidents present a dual challenge for Polymarket, forcing the company to address both technical security vulnerabilities and questions surrounding the integrity of its promotional campaigns.

Why it matters

This security incident compounds a difficult week for the prediction market platform, which is already facing scrutiny over its promotional practices.