Polymarket Restores Trading After $2.6M Security Breach Linked to Third-Party Provider

Polymarket has restored trading after a security incident resulted in more than $2.6 million in losses within minutes, prompting the prediction market platform to temporarily suspend new orders and pause relayer operations.

Blockchain data from Arkham showed that a wallet linked to a suspected attacker held approximately $2.65 million worth of POL tokens. The wallet had recently completed several swaps from USDC.e into POL through Relay before moving funds to multiple other addresses.

Following the incident, Polymarket placed its exchange into cancel-only mode while investigating the breach. This allowed users to cancel existing orders but prevented them from submitting new orders or executing trades. The platform also suspended relayer actions as a precaution.

"We're still looking into this," Polymarket said in a post on X, confirming that trading activity had been restricted during the investigation.

The platform later announced that it had identified and resolved the issue. According to Polymarket, one of its third-party service providers had been compromised, and the incident was referred to the relevant law enforcement authorities.

Polymarket subsequently confirmed that its platform was back online and said traders affected by the incident would receive full reimbursement.

The latest incident adds to a series of security concerns surrounding the prediction market. Last year, an alleged governance attack targeted a market concerning whether Ukraine would reach a mineral agreement with US President Donald Trump by a specified deadline.

Earlier this year, suspicious fund movements connected to Polymarket's UMA CTF Adapter infrastructure on Polygon also triggered an internal investigation.

The latest breach highlights the security risks that prediction market platforms can face through external service providers, even when the main trading platform remains operational.