Separate investigations by Chaos Labs and Inca Digital are said to have found that around 30% of activity related to the 2024 US Presidential election on Polymarket is the result of wash trading - a market manipulation technique to increase artificial trading volume.
According to a report from Fortune magazine, both companies claimed that the actual trading volume on this prediction platform was only $1.75 billion, compared to the $2.7 billion that Polymarket had reported.
Chaos Labs analysts explained the discrepancy in trading volume is because Polymarket counted the number of shares for the candidates in US dollar units, even though the actual value of each share on Polymarket is less than $1.
Data from Dune also revealed that the total open interest (OI) for the 2024 presidential election on this platform is just over $150 million. This open interest figure differs from the billions in trading volume, as traders continuously sell their positions to other participants on the platform.
Until early October, the gap between the two US presidential candidates was very tight and competitive. However, this has changed as Trump now leads Harris by 10 points as of October 12.
This gap has continued to widen, with the former President now leading Harris by around 30 points - an unusual margin in traditional US polls.
Allegations of market manipulation have started to spread as the gap between the two candidates has grown larger, prompting Polymarket to investigate and filter out users from the US and potential manipulators.
After the investigation, Polymarket announced that it had identified a single individual operating four separate accounts - Fredi9999, Theo4, PrincessCaro, and Michie - responsible for $28 million in bets supporting Trump.
While the individual's identity was not disclosed, a Polymarket spokesperson said the person is an experienced trader and a French citizen.
Immediately after Polymarket released the investigation results, another "whale" placed an additional $2 million in bets supporting Trump; however, this individual appears to be unrelated to the French citizen identified by Polymarket.
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According to Cointelegraph
