Over $600 Million In Polymarket Election Trades Took Place After Races Ended (wired.com) 14
An anonymous reader quotes a report from Wired: Prediction market boosters often tout the platforms as barometers of public opinion, or even "truth machines" offering a clearer picture of where things are headed than polling or other data. In 2024, for example, Kalshi beat many pollsters in forecasting the outcome of the US presidential race. But their trading activity can also tell more perplexing stories. Two global election markets on Polymarket's offshore platform, for instance, generated over $600 million in trading volume, far more than most political markets typically attract. Most of the activity took place buying and selling contracts tied to long-shot candidates who ultimately did not win. The report focuses on suspicious trading activity surrounding elections in Ethiopia and Romania, where researchers uncovered $284 million in questionable trades tied to Ethiopia's election and periods when 99.6% of trading volume in a Romanian election market was flagged as suspected "wash trading."
According to Wired, "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." Some accounts may also be artificially inflating their activity to qualify for potential cryptocurrency token rewards, a practice known as "activity farming."
In response to the Ethiopian trading activity, Polymarket told Wired that the company "immediately flagged this activity, investigated, and blocked the accounts from trading." The company did not explain why the suspicious trades were allowed to continue for months before action was taken.
According to Wired, "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." Some accounts may also be artificially inflating their activity to qualify for potential cryptocurrency token rewards, a practice known as "activity farming."
In response to the Ethiopian trading activity, Polymarket told Wired that the company "immediately flagged this activity, investigated, and blocked the accounts from trading." The company did not explain why the suspicious trades were allowed to continue for months before action was taken.
Gambling linked to fraud (Score:5, Funny)
say it ain't so
Re: Gambling linked to fraud (Score:3)
It's more that people want their money now and it takes time to verify. So there's a touch of arbitrage to be had being a market maker when people want to cash out 30 minutes early.
It's not fraud, it's taking advantage of gambling addiction.
Note. I didn't read the article, but it's known ther s time based arbitrage between an event and the official resolving of it.
Re: (Score:2, Informative)
People want their money now, and gambling companies want them to have their money as soon as possible so they can place another bet and lose it all.
Re: Gambling linked to fraud (Score:2)
But excessive drinking doesn't lead to bad consequences, right? RIGHT?
Re: Gambling linked to fraud (Score:2)
Re:Gambling linked to fraud (Score:4, Insightful)
"I will bet $100,000.00 that your [canidate/team] wins."
"Oh, no. They lost. Here is your $100,000.00"
It's not a bribe. It was just a prediction trade on a global market with many involved participants. Totally clean and above board. Nothing suspicious. Move along.
Re: (Score:2)
More like gambling linked to democratic outcomes, long-term governance linked to short term monetary gains.
Scammers gonna scam (Score:3)
Re: (Score:2)
Scamming is a long part of American tradition and culture. We love scamming each other and getting scammed in return.
In fact little known history that John Adams once sent a letter to Jefferson claiming to be a Moroccan prince who need to recover his fortune, just put 2,000 Spanish Dollars on the next boat and he'll send 50,000 back next time.
Explain? (Score:2)
The company did not explain why the suspicious trades were allowed to continue for months before action was taken.
Uhmm... profitable customers?
These need to be shut down NOW (Score:4, Insightful)
If the US was a functioning country they would have been shut down on their first day and their employees criminally prosecuted. But since the US is now an utterly corrupt country, starting at the top, that hasn't happened and unfortunately may not happen.
Re: (Score:2)