Polymarket suddenly suspended all new trades on Thursday — just 20 minutes after one trader publicly reported that $800,000 had been withdrawn from his account and warned of losses affecting other users. The cause of the incident and its scale have still not been officially disclosed.
The incident unfolded rapidly. At 17:45 UTC, a trader known on X as Car urged users to urgently secure their accounts, reporting that $800,000 had just been withdrawn from his account. According to him, an acquaintance of his lost another $600,000, bringing the total claimed losses to $1.4 million. The trader later clarified that all positions in his account had been forcibly sold.
Platform response: cancel-only mode
At 18:05 UTC, a critical failure notice appeared on the Polymarket status page. The exchange switched the system into a mode in which users with open positions can only cancel pending orders — new buys and sells are unavailable. At the same time, the platform's relayer was halted — an infrastructure component that, on behalf of users, sends token transfers and confirmations for debiting funds from wallets.
The company did not link the technical failure to the fund withdrawals and did not state the cause of the incident, the number of affected users, or the total volume of losses. The figures of $800,000 and $600,000 currently remain as claimed by the traders but have not been independently confirmed.
Context: the June $3 million hack
This is not the first serious incident for Polymarket. In June, attackers modified part of the code of a third-party provider operating on the platform's website. The modified page requested that a number of users confirm transfers of funds from their wallets to the attackers' addresses. In less than 15 accounts, about $3 million in pUSD was withdrawn — a token pegged to the dollar and used as new collateral for trades on Polymarket.
The smart contracts holding user funds were not affected at the time, and the platform promised to fully reimburse the losses of every affected user. So far, Polymarket has not given similar guarantees for the current incident.
The freeze occurred just two days after a competing prediction platform, Predict.fun, lost $400,000 to attackers. Two major fund withdrawals in a single week sharpen questions not only about prediction markets but also about the security of their infrastructure as a whole.
Cryptalist analysis: The Polymarket episode demonstrates a systemic vulnerability in the prediction-markets sector: the speed of response to a threat here comes at the cost of a complete halt in liquidity, which in itself creates reputational and market risks. The combination of two incidents in a week indicates that institutional participants should reconsider their assessment of the operational risks of prediction platforms and demand transparent mechanisms for reserving and reimbursing losses.