Polymarket Faces Wash Trading Claims Days Before U.S. Election

• Polymarket accused of wash trading. 
• Election betting odds are in question. 
• US election put Polymarket in the mainstream. 

With the United States presidential election just days away, the spotlight on polls and prediction platforms has intensified. This has brought Polymarket into the mainstream, with users investing billions into bidding on the election winner. Currently, former President Donald Trump leads, with the odds 67% in his favor. 

While Polymarket claims its bets are transparent, recent investigations have cast doubt on its metrics. Notably, investigators claim they found evidence of wash trading , artificially boosting the volume. This is especially concerning due to Polymarket’s potential effect on the US election. 

Wash Trading Concerns in Polymarket’s Election Predictions

Just five days ahead of the election, prediction platform Polymarket is facing scrutiny over its election bets. On Thursday, October 31, independent investigations by Chaos Labs and Inca Digital analytics firm recovered potential manipulation. 

The analysis suggests that Polymarket may be seeing “wash trading” in the election bets. Wash trading is a practice of placing a high volume of transactions, without real market intention, to artificially inflate trading volume and activity. This practice is concerning, as it can skew prediction odds. 

Currently, Polymarket’s bet on the US election winner shows a 67% chance of victory for Donald Trump. This prediction attracted over $2.7 billion in trading volume, supposedly showing real engagement. However, Chaos Labs’ investigators claim that around one-third of this volume could be due to wash trades. Inca Digital’s analysis showed similar results, suggesting that a “significant portion” of the bets show signs of wash trading. 

Whales Betting Big on Trump

Recent wash trading allegations were not the first time Polymarket attracted scrutiny. For one, election polls show a much tighter race than Polymarket’s betting odds. At the same time, reports revealed several “whale” accounts betting millions on Trump. 

Polymarket even came out with a statement on these whale trades, totaling $50 million. According to the company, these accounts, Fredi9999, Theo4, PrincessCaro, and Michie, are connected to a French billionaire. Polymarket did not reveal the name of the person pouring millions into US election bets. 

Earlier, Polymarket brushed off concerns about whales, claiming that the platform is transparent. Still, allegations of wash trading and whale activity raise serious concerns, due to its potential influence on the election. 

On the Flipside

• With crypto betting platforms, there is also a risk of bias. The platform appeals to crypto traders, who are not representative of the entire public. 
• The potential of foreign individuals or governments influencing the US election has been in the spotlight before. In the 2016 election, allegations surfaced of Russian involvement in the US election, with the FBI releasing a report about it.  

Why This Matters

Polymarket’s allegations of wash trading are concerning due to its potential influence on public opinion. Perceptions of the election’s outcome could shape voter confidence, potentially affecting the actual election. 

Read more about Polymarket betting: 
Polymarket Betters Are Overwhelmingly Losing Money: Here’s Why

Read more about Binance’s use of AI: 
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