Polymarket halted trading on its international platform on 29 October after hackers drained roughly $2.7m from more than 700 user accounts, in the second security incident to hit the prediction market operator this year. The breach originated not from Polymarket’s own systems but from a compromised third-party website monitoring script, underscoring how vendor dependencies can expose even well-funded platforms.
What happened
Polymarket briefly halted trading on its international exchange on Thursday, October 29, after users reported unauthorized withdrawals from their wallets, with blockchain analytics firms estimating that attackers took about $2.7 million from 710 wallets.
Hackers drained approximately $2.73 million from 737 Polymarket accounts through 985 withdrawals in about an hour.
The exploit traced back to DebugBear, a website performance monitoring tool used on Polymarket’s site.
For users who had Polymarket open during a short window, the script used their active sessions to sell trading positions and move funds out of their wallets.
Polymarket removed the compromised code, cleared its caches, paused trading and relayer actions, and reset active login sessions.
The incident affected Polymarket.com, its cryptocurrency-based international exchange, not Polymarket US, which operates separately under US financial regulation.
In response, the company halted trading on its international platform, saying it had fixed the issue and that trading resumed at 3 p.m.
Polymarket also moved to make affected traders whole.
The company said it was returning $3.9 million in total: $2.7 million for stolen funds and another $1.2 million to cover losses linked to the trading pause.
A person familiar with the matter said the company referred the matter to UK authorities.
This is not an isolated event for the platform.
Polymarket previously suffered a security breach in May that resulted in approximately $700,000 in cryptocurrency being stolen after hackers compromised a six-year-old private key used for internal operations.
Why it matters
A second breach within months does more than cost Polymarket money. It tests the credibility of a sector that has spent 2026 pushing hard into territory that overlaps with regulated sports betting and gambling. Prediction markets have been courting mainstream sports and media partners, and any platform asking operators, leagues or affiliates to integrate with it needs to demonstrate it can secure customer funds reliably.
The fact that the breach came through a third-party vendor rather than Polymarket’s core infrastructure is a reminder that supply-chain security is now a commercial issue, not just a technical one. For affiliates and media partners building traffic around prediction markets, repeated security incidents create reputational risk by association. Operators evaluating partnerships or white-label arrangements with prediction market platforms will likely factor incident history into due diligence alongside licensing and compliance questions.
The timing is also awkward. Polymarket and rival Kalshi have been expanding their footprint in sports-adjacent markets, including tie-ups with major leagues, at precisely the moment regulators in several US states are scrutinising whether such products should be treated as gambling. A high-profile hack, even one resolved within an hour and fully reimbursed, hands ammunition to critics who argue the sector lacks the consumer protections long required of licensed betting operators.
The bigger picture
Prediction markets have had a turbulent few months commercially and legally. Kalshi’s valuation has climbed sharply even as it fights legal battles in multiple US states, and the sector’s push into live sports markets has unsettled established sportsbook operators, as covered in Tenstar Media’s report on the NBA prediction markets deal. Security now joins regulation and litigation as a recurring theme for the category.
For an industry still working out how prediction markets fit alongside licensed gambling, repeated operational failures at a leading platform add weight to arguments that these products should face comparable oversight to regulated betting and casino operators, including safeguarding of customer funds. How Polymarket handles its investigation, reimbursements and any regulatory follow-up in the coming weeks will shape perceptions of the wider prediction market category among operators deciding whether closer integration is worth the reputational exposure.
Sources
- Gambling News – Polymarket Had to Pause Trading After Hackers Stole $2.7M from the Platform
- Yahoo Finance – Polymarket Hack Drains $2.7M From 700 Users as Third-Party Breach Forces Trading Halt
- CNBC – Some Polymarket user funds stolen by hackers; exchange referring matter to U.K. authorities
- Rolling Out – Polymarket halts trading after $2.7 million exploit hits users
- Casino.org – Polymarket Hack Drains Estimated $2.7M From Hundreds of Traders
- Hackread – Polymarket Users Lose $2.7 Million in Third-Party Script Hack
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