Crypto Hack: Suspected Polymarket Attack Triggers $520K In Losses

Key Insights:

• Investigators linked the latest Polymarket crypto hack to a compromised internal wallet key.
• Polymarket developers said user funds and market resolution systems remain unaffected.
• The incident adds to a growing list of DeFi security breaches reported this month.

Blockchain investigator ZachXBT reported a suspected exploit involving a Polymarket contract running on the Polygon network. Initial estimates suggest the attacker drained more than $520,000 worth of assets.

The incident adds to a growing wave of crypto security breaches reported in May, following recent attacks targeting Echo Protocol and KelpDAO.

Polymarket Contract Targeted in Latest Crypto Hack

ZachXBT reported a suspected exploit involving Polymarket’s UMA CTF Adapter contract on the Polygon network. According to a community alert shared by ZachXBT, the incident may have resulted in losses exceeding $520,000. Data from Arkham Intelligence also shows a glimpse into the exploit.

According to the report, the attacker wallet was repeatedly draining small amounts of POL tokens from contracts linked to Polymarket’s UMA CTF Adapter system, with transactions occurring roughly every 30 seconds.

Each transfer reportedly involved approximately 5,000 POL tokens, with cumulative losses eventually exceeding $600,000.

Polymarket developers later acknowledged the security incident in a public statement on X.

“We’re aware of the security reports linked to rewards payout. User funds and market resolution are safe.”

The team stated that early findings pointed to a compromised private key tied to an internal wallet used for operational top-ups. Developers added that the breach did not affect Polymarket’s core contracts or infrastructure.

Crypto Hacks Continue Rising Across DeFi

Crypto hacks have been on the rise this month of May. Earlier this week, Echo Protocol was forced to stop cross-chain transfers, after an attacker exploited $76.7 million worth of unauthorized eBTC tokens on the Monad ecosystem.

According to reports, the attacker later used 45 eBTC as collateral on Curvance to borrow nearly $868,000 in wrapped Bitcoin. Similarly, earlier in May, KelpDAO exploit also drained a total of $292 million.

The exploit led to the compromise of RPC nodes, disruption involving external RPC infrastructure, and forged cross-chain messages used during the attack.

Polymarket Seeks Entry Into Japan

In another development, Polymarket is reportedly preparing to enter the Japanese market. A Bloomberg report suggest that the prediction platform is targeting regulatory approval for prediction markets in the country by 2030.

The report stated that Polymarket has appointed a representative in Japan and plans to lobby regulators and policymakers. They are keen on getting through the legalization and authorization of prediction market platforms.

According to the sources, the company views Japan as a significant untapped growth opportunity. The country’s expansion efforts are reportedly being led by Mike Eidlin.

Polymarket currently blocks users based in Japan from placing bets on the platform due to existing regulatory requirements.

On the other hand, India is reportedly considering banning prediction platforms such as Kalsi and Polymarket. According to reports, the orders are expected to be enforced under Section 69A of India’s Information Technology Act. It empowers authorities to direct internet service providers to block access to online platforms.

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