Polymarket Ethiopia wash trading claims cloud volume

Polymarket Ethiopia wash trading claims are putting the prediction market's headline volume numbers under fresh scrutiny. A WIRED investigation found that two election markets on Polymarket's offshore platform, for Ethiopia and Romania, generated more than $600 million of trading, much of it after the outcomes were effectively settled. Most of the activity was in contracts on long-shot candidates who did not win.

What happened

Ethiopian Prime Minister Abiy Ahmed's party won 438 parliamentary seats this summer, against 13 for the nearest rival, WIRED reported. Yet only $173,000 was traded on Ahmed winning, versus more than $41 million on his chief of staff, Shimelis Abdisa. The market's total exceeded $285 million, and Polymarket's event page shows about $286 million of volume.

Former Polymarket trader Chris Park, who runs forensic firm MSR Decode, attributed roughly $284 million of it to paired accounts trading back and forth with one another. The firm analyzed more than 38,000 "trade loops" and found over 98% left neither side richer or poorer, with a median holding time of nine seconds.

Because the rules said the market would resolve only after the prime minister was formally sworn in, it stayed open for 123 days after the vote. Barnard College economist Rajiv Sethi called it a "zombie market" and said his wash-trading algorithm flagged 99.6% of volume in the older Romania market as suspicious for certain weeks.

Why it matters

The Polymarket Ethiopia wash trading findings matter because volume is the metric prediction markets use to sell their growth story, so inflated numbers distort comparisons with Kalshi and traditional venues. WIRED noted Polymarket recently raised more than $1 billion led by 1789 Capital at an estimated $21 billion valuation and has reported annualized revenue above $1 billion.

MSR Decode's leading explanation is "activity farming": traders inflating volume in the hope of a future token allocation, after Polymarket's marketing chief said in 2025 there "would be a token." Ulm University's Andre Guettler called the pattern a textbook airdrop farm. Sethi cautioned that what looks like wash trading is not always wash trading.

Polymarket's head of global intelligence and investigations, Shana Bautista, said the team flagged the activity, investigated and blocked the accounts, but the company did not explain why they could trade so much first, InfoBets noted. The episode adds to earlier concerns about retail losses on Polymarket and congressional pressure over insider trading on prediction markets.

What's next

The Commodity Futures Trading Commission declined to say whether it is examining the election trades. Its past Polymarket probes mostly involved possible insider trading rather than wash trading, though the agency has fined wash trading heavily in other markets.

Watch for whether Polymarket changes resolution rules that leave decided markets open, and whether analytics providers begin separating loop trades from headline volume. Until then, Polymarket Ethiopia wash trading will be cited by critics as evidence that raw volume overstates real demand.