As a seasoned crypto investor with over two decades of experience in the financial markets, I have seen my fair share of market manipulations and questionable practices. The recent allegations against Polymarket, a prediction platform that I’ve been keeping an eye on, are concerning to say the least.
It appears that independent probes conducted by Chaos Labs and Inca Digital have suggested, though not yet conclusively proven, that about 30% of activities related to the 2024 U.S. Presidential election on Polymarket might be due to wash trading – a practice aimed at inflating market activity through self-dealing transactions.
As per Fortune’s report, both companies assert that the real trading volume on their forecasting platform amounted to just $1.75 billion, contrasting with Polymarket’s reported figure of $2.7 billion.
Experts at Chaos Labs believe the significant difference in transaction volumes is due to Polymarket rounding up share counts for candidates to whole dollar amounts, even though individual shares on Polymarket are typically sold for less than a dollar.
Data from Dune also revealed the total open interest for the 2024 presidential election on the platform was just north of $150 million. This open interest figure is a different metric than the billions in transaction volume due to traders selling their positions to other participants on the platform.
Fears of market manipulation grip Polymarket
Up until the beginning of October, the gap in support for the two U.S. presidential contenders was tight and evenly matched. But starting from October 12th, there was a noticeable shift as Trump started to gain a substantial 10-point advantage over Harris.
Over time, this advantage grew even larger, eventually reaching approximately 30 points between the ex-president and Harris, a margin seldom seen in standard U.S. presidential surveys.
Rumors of suspected market tampering emerged as the difference between the two contenders widened, leading Polymarket to launch an investigation aimed at identifying and excluding U.S. users and any potential market manipulators.
After conducting an investigation, Polymarket asserts that they have found a single user operating four distinct accounts – Fredi9999, Theo4, PrincessCaro, and Michie – on their platform. This individual is believed to have placed approximately $28 million in pro-Trump wagers.
The person involved hasn’t been identified yet, but representatives from Polymarket described them as an experienced trader who hails from France.
Following the release of Polymarket’s report on their investigation, I found that another significant investor, not associated with the French national named in the report, has poured an additional $2 million into pro-Trump wagers. As an analyst, this new development sheds light on the ongoing interest and activity within the political betting market.
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2024-10-31 01:23