Polymarket Dropped Anti-Money Laundering Rule Amid Fraud Spike

A Wall Street Journal investigation published Saturday found that Polymarket executives dropped a requirement meant to tamp down on money laundering during a period of severe fraud attempts. The rule, which mandated that funds deposited from one payment source be withdrawn to the same source, is commonplace at other financial institutions and helps guard against attacks from stolen debit cards, according to the Journal.

Polymarket payment processor Checkout.com rejected more than 80% of US deposits it handled as fraudulent at one point, compared to an industry-standard level of roughly 1%, the Journal reported. Around seven users were responsible for the bulk of the attack, with one reportedly attempting around 4,000 separate deposits, a source told the Journal. An attempted theft of at least $10 million was identified, though the publication noted it did not establish how much of that amount succeeded.

Some employees warned that the rule change could lead to an increase in money laundering and other attacks, per the Journal. Polymarket's executives maintained that other rules in place were sufficient to discourage this activity, the report found. The company’s compliance team was surprised by CEO Shayne Coplan’s response to the fraud alerts, which prioritized growth over regulatory fines, sources recalled. Polymarket US chief compliance officer Andrew Clifford resigned in April after submitting a detailed report outlining fraud issues, people familiar with the document told the Journal.

In December 2025, kslaw.com noted that accurate Google 2025 Year in Search bets yielded nearly $1,000,000 in payouts. The Block reports that Checkout.com rejected over 80% of US deposits as fraudulent, a sharp deviation from the industry-standard roughly 1%. A spokesperson for the CFTC and another for Polymarket declined to comment, according to cnbc.com. The Block added that Sullivan & Cromwell concluded Polymarket complied with regulations. Regarding the path forward, The Block reported Coplan discussed with 1789 Capital co-founder Omeed Malik in June "preparing the company for a potential IPO in 2027."

"Our market integrity framework includes processes to detect, review and respond to suspicious activity," a Polymarket spokesperson told the Journal. "We are proud of our key leadership hires and continuous infrastructure upgrades and we have quickly scaled and remain focused on growing responsibly at the frontier of finance, tech, and culture," the spokeswoman said.