Polymarket suspended international trading after third-party breach

Prediction market platform Polymarket temporarily suspended trading on its international platform for about an hour on Thursday, following a security incident that compromised a third-party provider, the company said.

International Exchange Resumes Trading After Security Breach

Trading on the international exchange paused on Thursday afternoon as the company moved the platform into cancel-only mode. Polymarket stated that it identified and fixed the issue on its end, allowing trading to resume by 3 p.m. ET. The company’s U.S.-based platform was not affected by the breach, according to CNBC.

The disruption unfolded just days before the company’s international and U.S. exchanges face heightened trading volumes ahead of the U.S. midterm elections on November 3.

Diverging Reports on Financial Losses and Wallet Drains

While Polymarket initially stated that anyone affected would be made whole, reports regarding the scale of the financial impact varied widely. Traders warned on social media of substantial withdrawals, with one trader claiming an $800,000 loss and citing a friend’s loss of $600,000, bringing reported losses to $1.4 million. Meanwhile, an analysis of publicly available blockchain data by analytics firms Betting Intelligence and Polysights, cited by CNBC, indicated that at least $2.7 million was withdrawn across 710 wallets. Crypto news website The Block referenced data from blockchain analysis group Arkham putting the siphoned amount at approximately $2.65 million.

Polymarket did not confirm the exact financial figures or the total number of users impacted. CNBC reported that Polymarket communicated in a Discord chatroom that users who had less than $10,000 taken from their wallets would have funds restored by October 30, while those with larger sums withdrawn would need to sign a release form.

Investigation Point to DebugBear and Law Enforcement Involvement

Reports linked the source of the security incident to DebugBear, a United Kingdom-based company providing website performance-monitoring tools. DebugBear’s website became unavailable on Thursday afternoon, with the firm posting on X that it was impacted by an ongoing security incident and advising clients to remove specific embed codes. DebugBear did not immediately respond to requests for comment.

Polymarket stated that it referred the incident to law enforcement authorities in the United Kingdom.

Polymarket Processes 200 Million Dollars in Daily Activity

Polymarket invested $1 billion in the platform. The company processes about $200 million worth of trading activity daily.

This is certainly a significant and new form of breach that we’ve seen on Polymarket, said Dan Zimmermann, the chief intelligence officer at Betting Intelligence.

The timing right before the midterms …is certainly a wake up call for folks, he added.