Prediction market boosters often tout the platforms as barometers of public opinion, or even “truth machines” offering a clearer picture of where things are headed than polling or other data. In 2024, for example, Kalshi beat many pollsters in forecasting the outcome of the US presidential race. But their trading activity can also tell more perplexing stories.
Two global election markets on Polymarket’s offshore platform, for instance, generated over $600 million in trading volume, far more than most political markets typically attract. Most of the activity took place buying and selling contracts tied to long-shot candidates who ultimately did not win.
This summer, Ethiopian prime minister Abiy Ahmed’s Prosperity Party cruised to victory in federal elections, winning 438 parliamentary seats and paving the way for him to serve another five-year term. The closest competitor won 13 seats. On prediction markets, trading volume—the total value of contracts bought and sold—typically tracks roughly with the odds of a given outcome; frontrunners attract far more volume than long shots. But in this case, the trading patterns deviated sharply from the norm. Just $173,000 was wagered on Ahmed winning, compared to more than $41 million traded on his chief of staff, Shimelis Abdisa, becoming the country’s next leader. Altogether, the volume traded added up to over $285 million, nearly all on losing candidates.
Even odder? “Nearly all of it—about $284 million—came from pairs of accounts repeatedly buying and selling with each other,” says former Polymarket trader Chris Park, who now runs the prediction-market forensic analysis firm MSR Decode.
Such a high volume of seemingly pointless back-and-forth transactions has raised eyebrows among experts. “It's obviously some form of volume manipulation,” says Rajiv Sethi, a Barnard College economics professor who researches prediction markets.
When asked about these markets, Shana Bautista, Polymarket’s head of global intelligence and investigations, told WIRED that the team “immediately flagged this activity, investigated, and blocked the accounts from trading.” Polymarket did not respond to follow-up questions about why the accounts were able to trade such a high amount of volume before it took action.
The timing of these trades made things even weirder. Polymarket’s rules stipulated that the Ethiopia market would be resolved in October after the prime minister was formally appointed and sworn in, which meant that it stayed open for several months after Ahmed’s victory was all but a foregone conclusion. For 123 days after the election, bursts of seemingly irrational trading continued, prompting Polymarket users to leave comments like “THIS NOT RESOLVED?” and “fuckkkk.”
Sethi calls the phenomenon a “zombie market,” where people can buy and trade on events that have already taken place or are no longer happening.
Another market about a 2024 election in Romania facilitated what Sethi described as “even more dramatic” trading anomalies. The initial election was called off due to fears about foreign interference. A new race was held several months later, but instead of closing the original market in the meantime, Polymarket kept it running alongside the new option.
It was during this period that Sethi first noticed something weird appeared to be happening with the older market. An algorithm Sethi and his colleagues created to flag potential wash trading on Polymarket identified nearly all of the volume as suspicious. “99.6 percent of volume in this market for certain weeks has been wash trading,” Sethi says.
Wash trading is a type of market manipulation in which accounts repeatedly buy and sell assets to create the illusion of heavy trading activity, when in reality, money is simply moving back and forth. It’s banned on regulated financial exchanges in the United States and is specifically prohibited in Polymarket’s terms of service. An earlier study conducted by Sethi and colleagues found evidence of widespread wash trading on Polymarket’s offshore platform.
Wash trading could explain what happened with the Ethiopian and Romanian political markets, but because the identities of the traders is unknown, uncertainty remains. “What appears to be wash trading isn't always wash trading,” says Sethi.
MSR Decode ran an analysis of the Ethiopian market for WIRED, which found that the most likely explanation for the anomalous trading is “activity farming,” which is when people try to artificially inflate their trading volumes. The firm suspects that traders may have been interested in boosting their volume because they believed that they could benefit if Polymarket launched a cryptocurrency token. In 2025, Polymarket chief marketing officer Matthew Modabber told the hosts of a crypto-themed podcast that there “would be a token” but did not provide specifics. Sethi also finds it plausible that traders could be motivated by potential “token allocation” to higher-volume accounts.
This type of behavior has been observed before in the cryptocurrency industry. “These are textbook examples on how market participants farm a potential airdrop,” says Andre Guettler, the director of Ulm University’s Institute of Strategic Management and Finance, who researches the structure of prediction markets.
When MSR Decode analyzed the Ethiopian election market, it found that it was highly unlikely that the trading volume could be attributed to sophisticated traders using algorithms to eke out profits. It analyzed over 38,000 “trade loops” that took place after the election (instances where individual wallets bought and sold to each other in quick succession) and found that over 98 percent resulted in neither side losing or gaining money. The median time that the accounts held onto the contracts they purchased before selling them again was nine seconds.
These types of unusual trading patterns are not a new phenomenon on Polymarket. Earlier this year, Barron’s reported that much of the activity on markets predicting the 2028 US presidential election centered on unlikely candidates such as Elon Musk and New York City mayor Zohran Mamdani, neither of whom is eligible to run because they were born outside of the country.
Both Polymarket and its chief rival, Kalshi, have been publicly scrutinized for unusual market activity in recent months. Furor over suspicious activity on its recently launched perpetual futures market for cryptocurrency grew so intense on X that Kalshi published a blog post denying allegations of wash trading on it. (Sethi agrees with Kalshi that the allegations were unfounded. He argues that the unusual volume could instead be explained by Kalshi’s incentives for market makers, which create opportunities for other traders to profit from small price discrepancies.)
Polymarket recently raised an over $1 billion round of funding led by 1789 Capital, the venture capital firm where Donald Trump Jr. is a partner. The company is now valued at an estimated $21 billion, and earlier this summer, it announced that its annualized revenue was now over $1 billion. Polymarket’s explosive growth is often measured in volume traded, since it’s a metric that can point to how active users are.
The Commodity Futures Trading Commission, which regulates prediction markets in the United States, declined to comment on whether it is looking into these election trades. The CFTC previously investigated a number of suspected instances of market manipulation on Polymarket, including several exclusively reported by WIRED, but they usually involved potential insider trading rather than wash trading or other suspicious activity.
In the past, the agency has issued hefty fines for wash trading in other sectors. “It seems to me that the CFTC would want to know about weird activity in a very large market,” a former CFTC employee tells WIRED.
