Polymarket's $600 Million Election Trading Raises Concerns Over Manipulation

• •Polymarket saw over $600 million in trades after elections, primarily on losing candidates.
• •Most trading activity involved suspicious back-and-forth transactions, indicating possible manipulation.
• •Experts describe the situation as a 'zombie market' due to ongoing trades on resolved events.

Polymarket, an offshore prediction market platform, reported over $600 million in trading volume related to elections in Ethiopia and Romania after the races concluded. Most trades involved long-shot candidates who ultimately lost, with $284 million attributed to suspicious back-and-forth transactions between pairs of accounts, raising concerns of volume manipulation. Shana Bautista, Polymarket's head of global intelligence, stated that the activity was flagged and accounts were blocked, but the reason for the high volume before action was not disclosed. The Ethiopian market remained open for 123 days post-election, prompting user confusion. Rajiv Sethi, an economics professor, described the situation as a 'zombie market,' where trading continues on resolved events. The Romanian election market also exhibited unusual trading patterns, with 99.6% of its volume identified as suspicious wash trading. The incident highlights potential vulnerabilities in prediction markets and the need for regulatory scrutiny.