Polymarket rules eased before $10m fraud attack

Checkout.com rejected over 80% of deposits during the attack, against a 1% industry norm, reports say.

The hit

Polymarket reportedly scrapped a standard anti-money-laundering safeguard before fraudsters hit the platform with a $10m attack using stolen debit cards, according to a Wall Street Journal investigation. CEO Shayne Coplan allegedly told staff to prioritise growth over compliance & deal with fines later.

Why it matters

The episode raises the stakes for prediction markets that take fiat deposits through regulated payment processors, which fall under Bank Secrecy Act anti-money-laundering duties. The company has reportedly been preparing for potential growth initiatives, including a possible IPO.

The record

Fraud attempted	February 2026, via thousands of accounts linked to stolen debit cards (Wall Street Journal)
Deposit rejection rate	80%+ flagged by Checkout.com, vs 1% industry norm
Prior CFTC penalty	$1.4m fine, 2022 settlement over unregistered activity
Departures	US Chief Compliance Officer Andrew Clifford & US CEO Justin Hertzberg exited
Internal review	Sullivan & Cromwell review found Polymarket remained compliant, according to the review
May 2026 clean-up	Stricter controls, debit-card limits per account & Riskified hired to bolster fraud detection

What happens next

Watch for any CFTC response or enforcement move given Polymarket’s fiat deposit model, & for further disclosure as the company reportedly weighs an IPO.

Sources: Polymarket is being used for massive money laundering

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