Polymarket resumes international trading after third-party breach

Polymarket halted trading on its international prediction-market platform on Oct. 29 after one of its third-party providers was compromised, the company said. The outage lasted nearly an hour, and trading resumed at 3 p.m. Eastern Time after Polymarket said it had identified and fixed the problem affecting its platform.

The company said it had referred the matter to U.K. law enforcement because the provider operates in the United Kingdom. It also promised that affected wallets would be made whole, later saying it would fully reimburse all affected traders.

Users reported unauthorized withdrawals during the incident. CoinDesk said it confirmed that customers with balances on the international platform had their accounts drained, while social-media reports of individual losses and the precise total remained unverified by Polymarket. The Block, citing blockchain-analysis group Arkham, put the amount siphoned at about $2.65 million.

During the interruption, the exchange entered cancel-only mode. Customers could cancel outstanding orders, but could not place new orders or sell existing positions; a cancellation of a partially filled order removed only its unfilled portion. Polymarket also paused its relayer, a service that normally submits wallet transactions including token transfers and position redemptions without users paying network fees.

The disruption was confined to Polymarket.com, its wallet-based international venue, which operates as a decentralized-finance platform on Polygon and is not regulated in the United States. Its separate domestic exchange continued to operate normally and did not appear to be affected.

Polymarket had previously disclosed a June incident in which a compromised third-party vendor inserted a malicious script into its website for some users, and it pledged refunds. Estimates of losses in that episode ranged from about $3 million to $3.1 million, but no connection has been established between the June breach and the Oct. 29 incident.

The interruption came days before the Nov. 3 U.S. midterm elections, when Polymarket’s international and American exchanges were expected to handle higher trading volumes.