Researchers Find Likely Manipulation of Polymarket’s Five‑Minute Bitcoin Bets

Overview

• The Stanford and Singapore Management University working paper published Wednesday analyzed about 16,000 five‑minute Bitcoin contracts over two months and found repeated bursts of one‑sided trading on Binance in the final seconds before settlement.
• Those last‑second pushes frequently moved Binance’s spot price just enough to flip contract outcomes and then reverted within seconds, with the activity concentrated in overnight and weekend low‑liquidity hours.
• Using Polymarket’s public on‑chain settlements the researchers flagged roughly 821 accounts as likely manipulators and estimated those accounts captured about $8.2 million from retail bettors during the study period.
• The paper does not prove intent or a direct on‑chain link between Binance traders and the winning Polymarket wallets, and Polymarket says it uses multiple independent oracles and will shift some markets to settlement methods that average prices over longer windows.
• The findings put pressure on regulators and market designers because longer settlement windows largely eliminated the pattern in the study and similar short‑snapshot contracts are being considered by Cboe and Nasdaq, which may prompt closer oversight.