Some users of prediction market platform Polymarket’s international exchange had their funds stolen from their accounts in a hack by an anonymous third-party provider.
Polymarket has contacted law enforcement and promised to refund the affected traders. The number of users affected is unknown. The company’s US platform was not compromised.
Traders first reported on social media platforms Thursday afternoon that there had been unauthorized withdrawals from their accounts. In response, the company suspended trading on international platforms.
Polymarket announced that it had fixed the issue itself and resumed trading at 3:00 pm ET. Later, in a Discord chat room, users were told that users who had less than $10,000 withdrawn from their wallets would have their funds restored by October 30th, and users who had more than that number withdrawn would have to sign a consent form to receive the restoration.
A person familiar with the matter told CNBC that the issue stems from a hack of DebugBear, a website performance monitoring platform. DebugBear said in a post on X that it was affected by Thursday’s security incident. A Polymarket person familiar with the outage said the company referred the matter to law enforcement in the United Kingdom, where DebugBear is based.
DebugBear did not immediately respond to a request for comment.
Thursday Polymarket accounts withdrew at least $2.7 million from 710 other wallets, according to an analysis of publicly available data provided to CNBC by two analytics firms, Betting Intelligence and PolySights.
“This is certainly a significant and new form of breach that we’ve seen in polymarkets before, and the timing right before the midterm elections is certainly a wake-up call for people,” said Dan Zimmerman, chief information officer at Betting Intelligence.
Polymarket’s international prediction market exchange operates as a decentralized financial platform on the Polygon blockchain and is not regulated in the United States
The disruption comes just days before trading volumes are expected to increase on both the company’s international and U.S. exchanges during the Nov. 3 U.S. midterm elections.
A similar incident occurred in June, when Polymarket announced that its third-party vendor had been “compromised” and that the company would issue refunds to affected users.
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