Polymarket offers Donald Trump good opportunities – and could have a big fraud problem

More than a billion dollars was bet about the presidential election on the website Polymarket. However, new research suggests the site is being flooded with so-called “wash trading,” making the platform appear more popular than it is.

Polymarket currently predicts a 66.1% chance of Donald Trump winning the presidential election. But, according to FortuneBlockchain company Chaos Labs has found that up to a third of trades can be classified as wash trading, meaning users use manipulative tactics to make it appear that more people are involved than is actually the case is. Another company also found evidence of wash trading and questioned Polymarket's chances.

Omer Goldberg, the founder of Chaos Labs, told Fortune that “wash trading is not specific to Polymarket.” But as the platform takes on an increasingly larger role in election predictions, doubts are being raised about how seriously it should be taken as a legitimate indicator of what will happen after Election Day next Tuesday.

The news of wash trading comes later a Bloomberg report Earlier this month, it was discovered that a small percentage of users placing large bets can easily change the odds for one candidate or another. And last week there was a significant shift in favor of Trump on the platform was credited to a French trader who bet $28 million on the former president.

Goldberg told Fortune that “recognizing and reducing wash trading is critical to ensuring that prediction markets are representative of all and that market prices and volumes are determined by an authentic, persistent user base and are not disrupted by inorganic flows .”

Shayne Coplan, who founded the platform, said last week he believes Polymarket is “a reality check.”

“We’re just market nerds who believe prediction markets provide the public with a much-needed alternative data source.” he said on X.

“The beauty of Polymarket is that everything is peer-to-peer and transparent,” he added. “Even more transparent than traditional finance, where all data is obscured and only visible to the operator.”

Polymarket has not commented on the allegations of wash trading.