Polymarket Suspends Trading After Reporting Third-Party Provider Compromise
Key Takeaways
- •Polymarket suspended trading on Thursday after identifying a compromise at one of its third-party providers, which coincided with user reports of unauthorized account drains.
- •The platform activated cancel-only mode in response to a major outage of its Predictions Trading API before restoring full operations by 7:05 pm UTC.
- •The company has referred the incident to law enforcement and committed to reimbursing affected users, but has not yet specified how many accounts were impacted or how reimbursements will be executed.
- •This is at least the second vendor-related compromise Polymarket has disclosed, following a June incident in which hackers drained more than $2.9 million in user funds through a third-party vendor.
- •The event underscores wider industry concerns about third-party vendor security, a risk also highlighted by Coinbase's disclosure that an external analytics provider exposed customer data.
Polymarket suspended trading on Thursday after reporting that one of its third-party providers had been compromised, as users of the prediction markets platform claimed that funds had been drained from their accounts.
In an update to its status page, Polymarket said its Predictions Trading API had experienced a “major outage,” prompting the platform to temporarily halt trading. The company said the platform had been placed in “cancel-only” mode after it identified and fixed an issue impacting its operations. As of 7:05 pm UTC, Polymarket reported that all of its systems were operational.
“One of our third party providers was compromised, and we have referred this to relevant law enforcement,” Polymarket said. “Anyone who has been impacted will be made whole.”
The trading halt came as several users said online that thousands of dollars had been drained from their Polymarket accounts after their positions were sold without their consent. Cancel-only mode is a standard exchange safeguard that typically lets users cancel open orders while blocking new trades, a tool used to limit damage while an issue is investigated.
It is at least the second vendor-related compromise Polymarket has disclosed. In June, Polymarket reported that hackers were able to drain more than $2.9 million in user funds by compromising a third-party vendor.
Related: Coinbase denies systems breach, says vendor exposed customer data
Vendor compromises have rippled through the broader crypto industry as well: Coinbase has said a third-party analytics provider exposed customer data even as it denied any breach of its own systems. For trading platforms whose operations depend on external infrastructure, the incidents underscore that securing vendors can matter as much as defending their own systems.
Polymarket operates a crypto-based prediction markets platform that allows users to trade on the outcomes of real-world events, such as elections and economic data releases, and it gained broad mainstream attention during the 2024 United States election cycle.
The company has promised to make impacted users whole and has referred the matter to law enforcement, though it has not yet said how many accounts were affected or how reimbursements will be carried out — details, along with further status page updates, that users will be watching.
Source: Cointelegraph
