Polymarket US faced a major security test in February 2026 when fraudsters used stolen debit cards to attempt at least $10 million in illicit transactions. Payment processor Checkout.com rejected over 80% of deposits as fraudulent, far exceeding the 1% industry norm. Compliance staff reportedly escalated concerns to CEO Shayne Coplan, who allegedly told them to prioritize growth over regulatory fines. Polymarket later brought fraud rates down by May 2026 using Riskified, but now faces a reported CFTC investigation.
February stolen-card fraud attempt
- ▪Fraudsters used stolen debit cards on the Polymarket US platform in February 2026 to attempt at least $10 million in illicit withdrawals and wagers.
- ▪The $10 million figure associated with the February 2026 stolen-debit-card fraud attempt on Polymarket US represents the amount fraudsters attempted to move through Polymarket US, rather than a confirmed loss suffered by customers or the platform
- ▪Fraudsters connected stolen debit cards to thousands of Polymarket US accounts, funded them, and attempted to move the money through trading before withdrawing it.
Checkout.com rejection rates spike
- ▪The 80% fraud rejection rate experienced by Polymarket stands in contrast to a typical industry fraud rejection level of roughly 1%.
- ▪At the peak of a February 2026 stolen-debit-card fraud attack on Polymarket US, payment processor Checkout.com rejected more than 80% of deposits it handled for Polymarket as fraudulent
- ▪Visa reportedly pressured payment processors, including Checkout.com, to tighten screening as disputed transactions and chargebacks tied to Polymarket's February 2026 stolen-debit-card fraud attempt increased on prediction markets
CEO growth-first response allegations
- ▪Polymarket CEO Shayne Coplan reportedly responded to compliance concerns about a February 2026 surge in stolen-debit-card fraud on Polymarket US by telling staff to keep growing and pay a fine if regulators ever found out
- ▪Polymarket has not publicly confirmed the allegation, reported by The Wall Street Journal, that CEO Shayne Coplan told employees to prioritize growth over regulatory compliance
- ▪Current and former Polymarket employees stated that compliance workers escalated concerns about a February 2026 stolen-debit-card fraud surge on Polymarket US to CEO Shayne Coplan
Riskified deployment fraud mitigation
- ▪Polymarket hired outside anti-fraud provider Riskified to deploy automated fraud-decision systems and identify suspicious card activity.
- ▪By May 2026, Polymarket fraud rates returned to normal industry levels after Polymarket limited the number of debit cards users could connect to their accounts
CFTC designated contract market
- ▪Polymarket US operates as a legally separate entity from Polymarket's international, blockchain-based prediction market platform, with US customers trading through a federally regulated exchange
- ▪QCX LLC, doing business as Polymarket US, received its designation as a contract market from the Commodity Futures Trading Commission in July 2025.
- ▪In 2022, the Commodity Futures Trading Commission ordered Polymarket's operator to pay a $1.4 million civil penalty for offering event-based binary options without registration.
CFTC investigation document preservation
- ▪The Commodity Futures Trading Commission is reportedly investigating issues connected with Polymarket, including the February 2026 stolen-debit-card fraud episode on Polymarket US
- ▪Polymarket employees were instructed to preserve documents involving the February 2026 fraud incident and other matters amid a regulatory inquiry.
Debatable claims
- ▪The CFTC should penalize Polymarket over its February 2026 fraud incident
- ▪Payment networks should restrict debit card funding for prediction markets
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