---
title: "Polymarket election markets show signs of wash trading"
publisher: "Stockmark.IT"
author: "Stockmark.IT Website"
published: "2026-10-18T07:20:48+00:00"
modified: "2026-10-18T07:20:48+00:00"
date: 2026-10-18
canonical: "https://stockmark.it/polymarket-saw-600-million-in-election-trades-after-the-elections-were/"
category: "Business"
categories: ["Business", "Trading"]
image: "https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/polymarket-election-markets-show-signs-of-wash-trading.png?fit=1536%2C1024&quality=80&ssl=1"
format: "news"
language: "en-GB"
---

# Polymarket election markets show signs of wash trading

**Published:** October 18, 2026
**Author:** Stockmark.IT Website
**Categories:** Business, Trading
**Featured image:** ![Polymarket election markets show signs of wash trading](https://i0.wp.com/stockmark.it/wp-content/uploads/2026/10/polymarket-election-markets-show-signs-of-wash-trading.png?fit=1536%2C1024&quality=80&ssl=1)

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Two global election markets on the offshore prediction platform Polymarket generated over $600 million in trading volume, a figure that significantly exceeds the activity typically seen in political markets. The majority of this financial activity involved the buying and selling of contracts tied to long-shot candidates who ultimately did not win their respective elections. This unusual pattern of trading has raised concerns among experts regarding potential market manipulation and the integrity of the platform’s data.

In the case of the Ethiopian federal elections held this summer, Prime Minister Abiy Ahmed’s Prosperity Party secured a decisive victory, winning 438 parliamentary seats and ensuring his continuation in office for another five-year term. The closest competitor managed to secure only 13 seats. Despite this clear outcome, trading patterns on Polymarket deviated sharply from standard norms. Typically, trading volume tracks the odds of an outcome, with frontrunners attracting the most activity. However, in this instance, only $173,000 was wagered on Ahmed winning. In stark contrast, more than $41 million was traded on his chief of staff, Shimelis Abdisa, becoming the next leader. The total volume traded in this market exceeded $285 million, with nearly all of it concentrated on losing candidates.

Forensic analysis suggests that the vast majority of this volume was generated by coordinated accounts. Chris Park, a former Polymarket trader who now runs the prediction-market analysis firm MSR Decode, stated that approximately $284 million of the activity came from pairs of accounts repeatedly buying and selling with each other. Rajiv Sethi, an economics professor at Barnard College who researches prediction markets, described the phenomenon as a form of volume manipulation. He noted that the market functioned as a zombie market, where trading continued on events that had already effectively concluded. Polymarket’s rules stipulated that the market would remain open until the prime minister was formally appointed and sworn in, which kept it active for several months after the election result was known. This prolonged period of seemingly irrational trading prompted frustrated users to question why the market had not been resolved.

Similar anomalies were observed in a market concerning a 2024 election in Romania. The initial election was cancelled due to fears of foreign interference, and a new race was scheduled for several months later. During this interim period, Polymarket kept the original market running alongside the new option. Sethi and his colleagues used an algorithm to flag potential wash trading and found that 99.6 percent of the volume in the older market during certain weeks was suspicious. Wash trading, which involves accounts repeatedly buying and selling assets to create the illusion of heavy activity, is prohibited on regulated US financial exchanges and is explicitly banned in Polymarket’s terms of service.

MSR Decode’s analysis of the Ethiopian market suggests the most likely explanation is activity farming, where traders artificially inflate their volumes. The firm suspects that participants may have been motivated by the potential launch of a Polymarket cryptocurrency token, which could offer benefits to higher-volume accounts. Polymarket’s chief marketing officer previously indicated on a podcast that a token would be introduced, though no specifics were provided. Andre Guettler, director of the Institute of Strategic Management and Finance at Ulm University, described the behaviour as textbook examples of market participants farming a potential airdrop, a practice observed previously in the cryptocurrency industry.

The platform has faced scrutiny for such unusual activity. Polymarket recently raised a funding round of over $1 billion led by 1789 Capital, valuing the company at an estimated $21 billion. The company reported annualized revenue exceeding $1 billion earlier this summer. While the Commodity Futures Trading Commission declined to comment on whether it is investigating these specific election trades, the agency has previously investigated suspected market manipulation on Polymarket. Former CFTC employees suggest that the regulator would likely be interested in such abnormal activity in a market of this size.

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**Original URL:** https://stockmark.it/polymarket-saw-600-million-in-election-trades-after-the-elections-were/
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