Polymarket saw $600 million in election trades after the elections were over



When asked about these markets, Shana Bautista, Polymarket’s head of global intelligence and investigations, told WIRED that the team “immediately flagged this activity, investigated, and blocked the accounts from trading.” Polymarket did not respond to follow-up questions about why the accounts were able to trade such a high amount of volume before it took action.

The timing of these trades made things even weirder. Polymarket’s rules stipulated that the Ethiopia market would be resolved in October after the prime minister was formally appointed and sworn in, which meant that it stayed open for several months after Ahmed’s victory was all but a foregone conclusion. For 123 days after the election, bursts of seemingly irrational trading continued, prompting Polymarket users to leave comments like “THIS NOT RESOLVED?” and “fuckkkk.”

Sethi calls the phenomenon a “zombie market,” where people can buy and trade on events that have already taken place or are no longer happening.

Another market about a 2024 election in Romania facilitated what Sethi described as “even more dramatic” trading anomalies. The initial election was called off due to fears about foreign interference. A new race was held several months later, but instead of closing the original market in the meantime, Polymarket kept it running alongside the new option.

It was during this period that Sethi first noticed something weird appeared to be happening with the older market. An algorithm Sethi and his colleagues created to flag potential wash trading on Polymarket identified nearly all of the volume as suspicious. “99.6 percent of volume in this market for certain weeks has been wash trading,” Sethi says.

Wash trading is a type of market manipulation in which accounts repeatedly buy and sell assets to create the illusion of heavy trading activity, when in reality, money is simply moving back and forth. It’s banned on regulated financial exchanges in the United States and is specifically prohibited in Polymarket’s terms of service. An earlier study conducted by Sethi and colleagues found evidence of widespread wash trading on Polymarket’s offshore platform.



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