According to a study published by Columbia University, the rapid growth of the prediction market Polymarket may not be entirely organic, but rather exaggerated by artificial trading activities.
In an 80-page paper titled "Detection of Wash Trading Based on Networks" (not yet peer-reviewed), researchers at Columbia University found a significant amount of wash trading activity on Polymarket starting in July 2024. They discovered that wash trading accounted for nearly 60% of the platform's total trading volume that month.
"This activity did not significantly decrease until late April 2025, and then increased again to about 20% of the trading volume in early October 2025," they wrote.
The researchers determined that 25% of Polymarket's total trading volume over the past three years could be attributed to artificial trading.
One of the paper's co-authors, Columbia University professor Yash Kanoria, told Bloomberg, "I hope Polymarket will welcome the analysis in our paper." The authors accuse Polymarket of being largely responsible for wash trading and cite its operational structure as a contributing factor.
Cointelegraph reached out to Polymarket for comment but had not received a response by the time of publication.
Wash trading—the practice of the same trader buying and selling the same asset to create a false impression of market activity—is illegal in the United States because it manipulates prices and misleads investors about the true demand and liquidity of the market.
Allegations of wash trading are not new in the cryptocurrency industry. In 2023, a report by Solidus Labs stated that decentralized exchanges are particularly rife with wash trading. The report found that based on an analysis of 30,000 Ethereum-based decentralized exchange liquidity pools, nearly 70% participated in wash trading over a three-year period.
The latest allegations of wash trading cast a shadow over the rapid rise of Polymarket and the broader blockchain-based prediction market space.
These markets gained notoriety during the 2024 U.S. presidential election cycle for accurately predicting outcomes. Polymarket's popularity surged, leading it to reportedly seek a valuation of $10 billion amid rumors of significant funding rounds.
Polymarket has become one of the leading decentralized prediction platforms, allowing users to bet on real-world events without relying on a central bookmaker.
As Cointelegraph recently reported, Polymarket has been preparing to re-enter the U.S. market in November, just months after the Commodity Futures Trading Commission (CFTC) issued a no-action letter regarding the acquisition of a clearinghouse by the company.
Related: Newly formed crypto organization aims to establish unified standards for blockchain trading
Original article: “Columbia University Study: Up to 60% of Polymarket's Trading Volume May Stem from Wash Trading”
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