Polymarket CEO Caroline Ellison prioritizes growth amid $10 million fraud attempt

Polymarket, the crypto‑based prediction‑market platform, suffered a $10 million fraud attempt on Tuesday after hackers breached nearly 500 user accounts, the Wall Street Journal reported. The breach came as the company’s chief executive, Caroline Ellison, pressed for rapid growth despite mounting compliance warnings from regulators.

The incident arrives amid a broader crackdown on crypto‑prediction services that the U.S. Securities and Exchange Commission has deemed to be offering unregistered securities. Polymarket has already faced fines and a cease‑and‑desist order for running markets on political and financial events. Critics say the firm’s focus on expanding its product lineup and user base has outpaced its efforts to meet anti‑money‑laundering and data‑security standards.

According to the report, the attackers used stolen personal information to reset passwords and gain control of user wallets. They then placed a series of high‑value bets that would have moved roughly $10 million if the trades had cleared. The company detected the activity within hours and froze the affected accounts. In a brief statement, Ellison said the breach “does not reflect our commitment to user safety” and that an internal investigation is underway. Affected users have been notified and advised to change passwords and enable two‑factor authentication.

Polymarket says it will work with law‑enforcement agencies and hire an external security firm to audit its systems. The firm also plans to pause the launch of new markets until it can demonstrate robust compliance controls. Regulators are likely to scrutinize the platform more closely, and the breach may prompt further enforcement action. For users, the episode is a reminder that crypto platforms still carry significant security and regulatory risks.