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State of Play’s TL;DR
- A report says Checkout.com once rejected more than 80% of Polymarket deposits as fraudulent.
- This comes as the CFTC examines the prediction market operator.
Polymarket is facing fresh compliance scrutiny after a Wall Street Journal report said Checkout.com at one point rejected more than 80% of deposits it handled for the prediction market operator as fraudulent, versus an industry rate of about 1%.
The report raises new questions about Polymarket’s fraud controls, payment safeguards, and regulatory posture in the US prediction market space. According to the Journal, the Commodity Futures Trading Commission is examining the company, and employees have been told to preserve records tied to the fraud incident and other matters.
Report details stolen-card funding and internal concerns
The Journal reported that fraudsters in February 2026 used stolen debit cards to fund thousands of US Polymarket accounts, place wagers, and attempt withdrawals. The article did not establish how much money was ultimately stolen, though the fact pattern involved a reported $10 million fraud attempt.
Employees reportedly raised concerns about how the company responded. The Journal also said executives later removed a safeguard that required withdrawals to be sent back to the same payment source used for deposits.
Polymarket’s US chief compliance officer, Andrew Clifford, resigned in April after submitting a report to executives detailing fraud concerns, according to the Journal. The company’s US chief executive and senior regulatory and anti-money-laundering personnel also later departed.
Polymarket said it has since strengthened its infrastructure and leadership. According to people familiar with findings, an internal investigation by Sullivan & Cromwell concluded the company had complied with regulations. The company also said it added risk-management personnel and improved compliance procedures and product testing.
CFTC oversight adds to pressure on prediction markets
The reported examination comes as the CFTC has taken a closer look at prediction markets more broadly. In June, the agency proposed rules for prediction markets.
The CFTC charged a US service member in April with allegedly using classified information to trade a Polymarket contract tied to the capture of former Venezuelan President Nicolás Maduro. The CFTC alleged the trader generated more than $404,000 in profits.
Separately, the report said a July incident exposed the accounts of nearly 500 users through an apparent flaw involving stolen personal information.
Based on reporting by BitKe.
