Polymarket Faced Major Security Breach But No Transparency - Platform Went Silent

Almost a week ago, the decentralized prediction market platform Polymarket started trending on social media due to many users reporting their accounts being compromised. Users on Twitter and Reddit posted their experiences, detailing the money they lost and the stress caused by the incident.

What Really Happened?

The root cause of the problem was not directly from Polymarket itself. A third-party service provider focused on identity verification was responsible. Specifically, users who signed up using Magic Labs were the most affected. For those unfamiliar, Magic Labs offers a streamlined registration process — you can log in using just your email and automatically create a non-custodial Ethereum wallet. This is convenient for crypto newcomers who lack experience in wallet management.

The security breach affected the network due to vulnerabilities introduced by the third-party verification system. Polymarket addressed this on their official Discord channel last Tuesday, acknowledging a security issue that had been resolved and that there was no remaining risk.

But The Major Issue? No Transparency

This is where the controversy begins. Even though Polymarket confirmed the issue, they did not specify the extent of the damage. There was no official statement on how many users were affected, how much total funds were lost, or who exactly the third-party provider responsible was. This approach left many questions in the community and eroded trust.

For newcomers to the ecosystem, this serves as a reminder to verify the security measures of platforms before depositing assets. Relying on third-party services carries inherent risks that should be part of the decision-making process.