Polymarket Election Markets Show $600 Million in Suspicious Trades Post-Vote

Image: Ars Technica · Source

Polymarket's offshore election markets saw over $600 million in trades after outcomes were settled, largely involving long-shot candidates and likely wash trading, raising questions about market manipulation and platform oversight.

Polymarket, a prominent prediction market platform, experienced more than $600 million in trading volume on its global election markets even after electoral outcomes were effectively settled, according to an Ars Technica report from October 2026. This extensive trading activity defies the typical pattern where trade volume aligns with likely winners, instead focusing heavily on losing candidates.

One notable example pertains to Ethiopia’s 2026 federal election. Although Prime Minister Abiy Ahmed’s Prosperity Party won decisively, capturing 438 seats compared to the nearest competitor’s 13, only about $173,000 in wagers concerned Ahmed’s victory. Contrastingly, over $41 million was traded on his chief of staff Shimelis Abdisa becoming the next leader. In total, trading volume for this market surpassed $285 million, predominantly centered on candidates who did not win.

Further scrutiny revealed that approximately $284 million of this volume derived from pairs of accounts repeatedly buying and selling with each other—a behavior experts recognize as wash trading. Rajiv Sethi, an economics professor specializing in prediction markets, described this as likely volume manipulation. Polymarket confirmed in a statement to WIRED that they flagged the suspicious activity, investigated, and suspended the involved accounts but did not clarify how such extensive trades occurred before intervention.

The market stayed open for 123 days after the election was effectively decided, which Polymarket’s own rules stipulated should have been resolved upon the prime minister’s formal swearing-in. This delay allowed anomalous trading to persist, frustrating users.

A similar pattern appeared in a Romanian 2024 election market, where an initial vote was postponed due to foreign interference concerns. Polymarket kept both the original and subsequent elections’ markets live simultaneously. Analysis found that 99.6% of the trading volume in the older market during certain weeks was suspicious wash trading.

Experts suggest such wash trading may be tied to “activity farming,” where traders inflate volume artificially, possibly to position for benefits if Polymarket issues a cryptocurrency token in the future—an idea hinted at by Polymarket’s chief marketing officer in 2025 but never formalized. This behavior mirrors schemes observed in the cryptocurrency industry, where traders seek potential token airdrops.

An extensive forensic study by MSR Decode found that the majority of trades in these markets resulted in no net gain or loss and were held for only seconds before being reversed. This undercuts the notion that these trades reflected genuine speculative activity aiming for profit.

Polymarket’s explosive growth, marked by high trading volumes and a recent valuation near $21 billion following a $1 billion funding round, relies heavily on reported volumes as a health measure of market activity. However, these findings highlight challenges in distinguishing legitimate speculation from manipulative practices in unregulated or offshore markets.

The U.S. Commodity Futures Trading Commission (CFTC), which oversees U.S. prediction markets, has previously probed Polymarket for insider trading but has not commented specifically on wash trading issues. Given the scale of suspicious activity, observers suggest regulatory interest may be warranted.

This episode underscores the complexities and risks in emerging decentralized or offshore financial prediction platforms, spotlighting the need for stringent monitoring and transparency to maintain market integrity.