Polymarket Accused of Fake Bets to Drive Growth
An investigation says Polymarket used fake bets in promo videos to speed up growth. The revelation could put pressure on its planned U.S. expansion.
Key Takeaways
- Polymarket is accused of using fake bets in marketing videos to drive growth.
- According to the Wall Street Journal, about $1.9 million in shown bets across more than a thousand videos was not real.
- The scandal could affect how regulators review Polymarket's onshore plans.
Polymarket, a platform known for its blockchain-based prediction markets, is being accused of using fake bets to boost its growth. A Wall Street Journal investigation found that about $1.9 million in bets shown across more than a thousand videos were not real. These fake bets were shown on fake versions of the website, mainly to attract American users.
How the Fake Bets Worked
Real bets on Polymarket are handled on the Polygon blockchain and settled in USDC. Markets are resolved through UMA's permissionless oracle, where anyone can propose or challenge outcomes by posting a $750 bond. All positions are public and verifiable.
But the marketing push happened completely outside that transparent blockchain setup. The investigation found that about 70% of the videos reviewed showed bets that were not real. In some clips, for example, a creator was shown winning $100,000 on a bet tied to a Trump statement, even though that statement was never made publicly. Many of these videos were recorded on fake websites that copied the real site.
The creators behind this content, often students, made a few thousand dollars a month and were told not to disclose their payments. A marketing agency spread the videos, which together pulled in more than 140 million views. That pattern raises questions about the platform's reliability, especially given earlier incidents that hurt user trust.
Regulatory Context and Impact
The revelations come at a sensitive time for Polymarket. In 2022, the company was hit with a $1.4 million fine from the U.S. Commodity Futures Trading Commission (CFTC) for operating an unregistered trading facility. After that, Polymarket blocked U.S. users until the end of 2025 and restructured in Panama.
More recently, Polymarket gained regulated market access in the U.S. and is trying to bring its exchange onshore. At the same time, the platform has taken steps to block VPN access and roll out stricter identity checks, partly because it has been blocked in more than 30 countries, including Spain and India.
That fits into a broader trend of trading platforms expanding their offerings. For example, major players are adding new products to keep users around longer and maintain more volume on the platform, like crypto exchanges expanding into stocks and commodities.
The scandal around the fake bets could affect how regulators view Polymarket's onshore plans. The company has said it will audit its promotional content, which could play a role in the next phase of competition in prediction markets.
Why This Matters for European Crypto Users
Even though the fake bets were aimed mostly at U.S. users, this case could also matter for European crypto users. It highlights how important transparency and compliance are on blockchain-based platforms, especially as prediction markets keep growing around the world. European regulators are watching these developments closely, which could point to stricter regulation and oversight of similar services in Europe.
