Polymarket CEO Allegedly Ignored $10M Fraud Scheme; CFTC Investigates
The Commodity Futures Trading Commission (CFTC) is investigating Polymarket after its CEO, Shayne Coplan, allegedly downplayed a major fraud incident in February involving stolen debit cards used to siphon at least $10 million from the platform. According to reports, payment processor Checkout.com flagged over 80% of deposits as fraudulent during this period—far above industry norms. Compliance staff raised concerns with Coplan, but he reportedly prioritized growth and instructed employees not to worry about potential regulatory consequences. The fallout led to resignations within Polymarket’s U.S. leadership team, including the chief compliance officer and heads of regulation and anti-money laundering. A law firm hired by the company concluded it had followed applicable regulations, though former federal prosecutors warned that its actions could violate money-laundering laws. In response, Polymarket eliminated a policy requiring withdrawals to be returned via the original payment method—a move some staff feared would invite further illicit activity. The platform has since reduced fraud rates by limiting debit card attachments per user and is preparing for an initial public offering with Warren Jenson as its new CFO.
Topics: CFTC investigation compliance failure fraud prediction markets