More than $600 million in trades on Polymarket's election markets were executed after the races concluded

Election-related contracts in Ethiopia and Romania saw heavy trading volume after the results were finalized. One expert said: "Obviously, this is a form of volume manipulation."

For example, two global election markets on Polymarket's offshore platform generated over $600 million in trading volume, far more than most political markets typically attract. Much of the activity involved buying and selling contracts for candidates who ultimately did not win.

This summer, Ethiopian Prime Minister Abiy Ahmed's Prosperity Party won federal elections, winning 438 seats in parliament, paving the way for another five-year term. The nearest competitor won 13 seats. In prediction markets, trading volume—the total value of contracts bought and sold—usually follows roughly the odds of a given outcome. Leading figures attract much more volume than long shots. But in this case, the trading patterns deviated greatly from the norm. Only $173,000 was bet on Ahmed winning, while more than $41 million was exchanged as his chief of staff, Shimlis Abdisa, became the country's next leader. In total, the volume of transactions increased to more than $285 million, almost all of them with losing candidates.

Even weirder? "Nearly all of it—about $284 million—came from pairs of accounts that frequently traded with each other," says former Polymarket trader Chris Park, who now runs forensic analysis firm MSR Decode.

Such a high volume of seemingly meaningless back and forth transactions has caused concern among experts. "Obviously, this is some kind of volume manipulation by an economics professor who researches prediction markets," says Rajeev Sethi, of Barnard College.

When asked, Shana Bautista, Polymarket's global head of information and research, told WIRED that the team "immediately flagged this activity, investigated it and blocked the accounts from trading." Polymarket did not respond to follow-up questions about why the accounts were able to trade high volumes before their action.

The timing of these deals made things even weirder. Polymarket rules stipulated that the Ethiopian market be settled in October after the appointment and formal swearing in of the prime minister, which meant that the market remained open for several months after Ahmed's victory. For 123 days after the election, the flurry of seemingly illogical transactions continued, prompting Polymarket users to post comments such as "It's not resolved?" and "damn"

Sethi calls this phenomenon the "zombie market," where people can buy and trade on events that have already happened or will no longer happen.

Another market around the 2024 elections in Romania facilitated what Seti described as "even more dramatic" trade anomalies. Primary elections were canceled due to fear of foreign interference. A few months later a new competition was held, but instead of closing the main market during this time, Polymarket continued it alongside the new option.

It was during this period that Sethi first noticed that something strange was happening in the old bazaar. An algorithm that Sethi and his colleagues developed to flag possible wash trades on Polymarket identified almost all volume as suspicious. Sethi says: 99.6% of the volume of this market for certain weeks were wash transactions.

Wash Trading is a type of market manipulation where accounts repeatedly buy and sell assets to create the illusion of heavy trading activity, when in reality, money is simply flowing back and forth. It is prohibited on regulated financial exchanges in the United States and is specifically prohibited in the Polymarket Terms of Service. A previous study by Sethi and colleagues found evidence of extensive laundering trade on the polymarket marine platform.

The wash trade could explain what happened in the political markets of Ethiopia and Romania, but since the identity of the traders is unknown, ambiguity remains. "What appears to be a wash business is not always a wash business," says Sethi.

MSR Decode conducted an analysis of the Ethiopian market for WIRED, which found that the most likely explanation for the unusual trading is "activity farming," when people try to artificially increase their trading volume. The company suspects that traders may have been interested in increasing their volume because they believed they could profit if Polymarket launched a cryptocurrency token. In 2025, Polymarket chief marketing officer Matthew Modber told the hosts of a crypto-themed podcast that "it will exist. A token," but gave no details. Sethi also recognizes that traders can be incentivized by potential "token allocation" to higher volume accounts.

This type of behavior has already been seen in the cryptocurrency industry. "These are textbook examples of how market participants create a potential airdrop," says Andre Gottler, director of Ulm University's Institute for Strategic Management and Finance, who researches the structure of prediction markets.

When MSR Decode analyzed the Ethiopian election market, it found that trading volume was unlikely to be attributed to sophisticated traders using algorithms to make profits. analyzed more than 38,000 “trading rings” that occurred after the election (instances in which separate wallets bought and sold each other in sequence) and found that more than 98 percent resulted in neither party losing or gaining money. The average time accounts held on contracts they bought before reselling was nine seconds.

These types of unusual trading patterns are not a new phenomenon in Polymarket. Earlier this year, Barron's reported that most of the activity in markets predicting the 2028 US presidential election is focused on unlikely candidates like Elon Musk and New York Mayor Zahran Mamdani, neither of whom are eligible to run because they were born abroad.

Both Polymarket and its main competitor, Kalshi, have come under scrutiny for unusual behavior. Market activity In recent months, anger over suspicious activity in its recently launched permanent futures market for cryptocurrencies has grown so intense at X that Kalshi published a blog post denying allegations of wash trading. (Sethi agrees with Kalshi that the claims were unfounded. He argues that the unusual volume can be explained by Kalshi's incentives for market makers, which created opportunities for other traders to profit from small price differences.)

Polymarket recently raised more than $1 billion in funding led by 1789 Capital, a venture capital firm in which Donald Trump Jr. is a partner. The company is currently valued at $21 billion and announced earlier this summer that its annual revenue is now over $1 billion. Polymarket's explosive growth is often measured by transaction volume, as this is a measure that can indicate how active users are.

The Commodity Futures Trading Commission, which regulates futures markets in the United States, declined to comment on whether it was looking into the election trades. The CFTC has previously investigated a number of suspected market manipulation cases at Polymarket, including several exclusively reported by WIRED, but they typically involved potential insider trading rather than wash trading or other suspicious activity.

In the past, the agency has issued hefty fines for the laundering business in other sectors. "I think the CFTC wants to do a pretty big job on the odd activity in the market," a former CFTC employee told WIRED.