Polymarket CEO Prioritized Growth Amid Fraud Issues; Kalshi Faces Scrutiny for Ethereum Trading Activity
The Wall Street Journal reported that Polymarket's CEO, Shayne Coplan, allegedly prioritized growth over addressing fraud concerns as the platform faced a surge in fraudulent activity. In February, fraudsters used stolen debit cards to fund accounts and attempt withdrawals worth at least $10 million on its U.S. platform. Payment processor Checkout.com flagged more than 80% of these deposits as fraudulent during peak times—far above normal rates. Polymarket reportedly relaxed a withdrawal safeguard despite employee concerns about increased money-laundering risks, leading to the resignation of its compliance chief in April. Meanwhile, Kalshi is under scrutiny for unusual trading patterns on its Ethereum perpetual futures market. Analyst Beni highlighted $539 million in 24-hour volume with only $3.1 million open interest—a 174-to-1 ratio that raises concerns about potential wash or fake trading activity. Critics noted repeated trades accounting for nearly 60% of Kalshi’s Ethereum volume over four days, suggesting artificial market movement.
Topics: CFTC investigation compliance crypto financial fraud