Polymarket Links Trading Suspension to Third-Party Security Incident

Polymarket temporarily halted trading on its international platform after a third-party provider was compromised, leading to drained user accounts. The company said it had identified and fixed the issue, referred the incident to law enforcement and would compensate affected users. Trading was expected to resume around 3 p.m. ET on Thursday, according to the company's announcement.

The suspension followed reports from users that funds had been drained from their accounts. The incident was linked to DebugBear, a performance-monitoring provider whose code was used on Polymarket's website, according to The Wall Street Journal. DebugBear said it was responding to a security incident and advised customers to remove its embedded code.

Attack's Financial Impact

Blockchain activity reviewed by The Wall Street Journal indicated that a wallet believed to be linked to the attacker had received more than $2.5 million from user accounts across more than 900 transactions. While investigating, Polymarket switched to a cancel-only mode, which prevented users from placing new buy or sell orders but allowed them to cancel existing orders.

Polymarket said it had resolved the issue and would make affected users whole. However, it did not disclose the full extent of the incident in its initial announcement.

Third-Party Risks

The incident highlights growing risks for financial platforms relying on third-party providers. In another case involving a third-party provider, Pepperstone disclosed a client data breach but said trading accounts, passwords and bank details were unaffected.

Polymarket has faced previous challenges including regulatory scrutiny and trading losses. In August 2026, the platform's monitoring programme included blockchain analytics and trade surveillance to identify suspicious activity. An April report found that at least 100,000 Polymarket wallets had lost $1,000 or more through trading.