Author: Shenchao TechFlow
After being hacked for $2.7 million, Polymarket pledges full reimbursement: victims with losses over 10,000 yuan must sign a liability waiver and complete KYC.
DeepChain Overview: Polymarket, the leading decentralized prediction market, has just undergone a severe security and public relations crisis. On October 30, the platform's international site was compromised due to a vulnerability in a third-party service, resulting in the theft of approximately $2.7 million across more than 710 wallets, forcing the official team to immediately suspend trading and initiate remediation measures.
Although the platform publicly promised full compensation to victims, the subsequent release of implementation details sparked widespread controversy in the community. Retail investors with losses under $10,000 can have their funds directly replenished, while larger victims must sign legal liability waivers and submit verified identity documents to recover their assets.
The gap between verbal full compensation and written liability waivers reveals Web3 flagship projects' instinctive compliance defenses in response to sudden crises. This negotiation over settlement terms and privacy concessions is subjecting the credibility of the decentralized prediction market leader to the market’s harshest scrutiny.
International site hacked: $2.7 million in funds illegally transferred
According to CNBC, Polymarket, the world’s largest decentralized prediction platform, experienced an unexpected outage after its third-party technology provider was compromised by malicious hackers, resulting in unauthorized access to部分 liquidity and accounts.
On-chain security monitoring data indicates that the attack affected over 710 trader wallets, with approximately $2.7 million in token assets unauthorizedly transferred. The official team immediately suspended trading on the international platform, filed a report with law enforcement, and specifically clarified that the U.S.-compliant site was not affected.
As a phenomenon protocol that emerged alongside this year’s global political elections and macro events, Polymarket’s sudden incident triggered immediate market volatility. In response to liquidity impairment and a crisis of trust, the official team swiftly issued a statement, publicly committing to use its own reserves to ensure affected users are fully reimbursed for their losses.
The compensation plan marks a turning point: instant payouts for small amounts, with thresholds for larger sums.
However, as the specific implementation details emerged, the so-called full compensation did not involve a uniform one-click restoration. According to insiders and affected traders, the platform established a clear $10,000 threshold, implementing two distinct compensation strategies.
For the vast majority of small retail investors with individual losses under $10,000, Polymarket plans to directly refund the funds to their accounts by October 30 through backend verification, with an extremely simple process. However, for larger victims with losses exceeding $10,000, the compensation process is subject to stringent legal prerequisites.
The platform requires large-volume traders to fully sign a Release Agreement, explicitly waiving all legal rights to pursue civil compensation or initiate legal action against the platform regarding this incident, in order to access the fund reimbursement channel, creating a clear tiered distinction.
Identity verification requirements and liability disputes: Victims question unfair legal clauses
This conditional compensation mechanism quickly sparked intense backlash from the crypto community. Several large traders posted screenshots of the signed agreement on social media, accusing the platform of verbally promising full reimbursement while actually coercing victims into surrendering their legal defense rights through contractual terms—effectively forcing them to sign a mandatory settlement receipt.
What users find even harder to accept is that some large holders were required to upload their passports or personal identification documents (KYC) when signing the agreement. For traders accustomed to anonymous, non-custodial on-chain transactions, being forced to surrender personal privacy data after suffering financial losses constitutes a double psychological blow.
To date, Polymarket’s official Twitter account has maintained only a verbal reassurance tone and has not disclosed the full legal contract to the public. This lack of transparent disclosure has further intensified widespread concerns about hidden clauses in the terms of service that favor the platform’s immunity from liability.
Rebuilding Trust and the Boundaries of Compliance: The Institutional Challenge for the Leading Prediction Market
Polymarket’s response strategy vividly illustrates the typical legal defense model employed by rapidly expanding crypto giants when facing external attacks. In the face of potential class-action lawsuits and regulatory accountability, the company prioritizes small, direct payouts to stabilize the majority of retail users, while simultaneously building a legal firewall to block loopholes for large-scale claims.
But this kind of business defense maneuver is causing irreversible erosion of its decentralized brand consensus. When an on-chain prediction market that touts being trustless still resorts to the traditional Wall Street blame-shifting logic in the face of a black swan event, the faith of underlying users is inevitably severely shaken.
As the election trading frenzy enters deeper waters, Polymarket faces an unavoidable challenge: how to balance platform commercial security with the pure spirit of on-chain contracts. This $2.7 million incident may serve as a sobering wake-up call before it achieves mature compliance.
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