A new academic paper is raising questions about the true scale of trading on Polymarket, one of crypto’s fastest-growing prediction platforms. Columbia University researchers say that as much as a quarter of its activity could be fake —created by users trading with themselves or coordinated networks of wallets to inflate apparent market volume.Digital assets meet tradfi in London at the fmls25The study, published Thursday, analyzed over two years of blockchain data and found widespread evidence of wash trading — the rapid buying and selling of contracts to simulate real activity without changing overall market exposure.Wash Trades Inflate Activity Across MarketsResearchers estimate that fake trades accounted for nearly 25% of total historical volume. The problem intensified in late 2024, when around 60% of weekly activity was flagged as suspicious. Sports and election prediction markets were hit hardest, with some weeks showing over 90% of trades classified as likely wash trading.Columbia’s research team developed an algorithm to detect coordinated trading behavior, tracking wallets that opened and closed positions within seconds and repeatedly traded with one another.The analysis uncovered intricate clusters of accounts — some involving more than 43,000 wallets — collectively responsible for about $1 million in trading volume, much of it at negligible prices. In many cases, contracts appeared to change hands through long chains of wallets to mimic genuine market flow.The researchers also traced patterns of USDC transfers across these wallets, suggesting users recycled the same funds to inflate metrics. Despite high trading volume, the suspected accounts made little or no profit, pointing to a different motive altogether.Incentives, Not Profit, May Drive Fake TradesThe Columbia team believes the wash trading was not intended to earn money directly but to position traders for potential rewards such as token airdrops or platform rankings.Polymarket, which lets users bet on yes/no outcomes using the USDC stablecoin, charges no trading fees and doesn’t require identity verification — factors that may have made the platform especially vulnerable to this type of manipulation.The paper also notes that speculation around a forthcoming Polymarket token could have encouraged users to boost their trading statistics in anticipation of future distributions.Polymarket has faced manipulation claims before, especially around politically charged events like the U.S. presidential election. Not everyone agrees with the accusations. This article was written by Jared Kirui at www.financemagnates.com.A new academic paper is raising questions about the true scale of trading on Polymarket, one of crypto’s fastest-growing prediction platforms. Columbia University researchers say that as much as a quarter of its activity could be fake —created by users trading with themselves or coordinated networks of wallets to inflate apparent market volume.Digital assets meet tradfi in London at the fmls25The study, published Thursday, analyzed over two years of blockchain data and found widespread evidence of wash trading — the rapid buying and selling of contracts to simulate real activity without changing overall market exposure.Wash Trades Inflate Activity Across MarketsResearchers estimate that fake trades accounted for nearly 25% of total historical volume. The problem intensified in late 2024, when around 60% of weekly activity was flagged as suspicious. Sports and election prediction markets were hit hardest, with some weeks showing over 90% of trades classified as likely wash trading.Columbia’s research team developed an algorithm to detect coordinated trading behavior, tracking wallets that opened and closed positions within seconds and repeatedly traded with one another.The analysis uncovered intricate clusters of accounts — some involving more than 43,000 wallets — collectively responsible for about $1 million in trading volume, much of it at negligible prices. In many cases, contracts appeared to change hands through long chains of wallets to mimic genuine market flow.The researchers also traced patterns of USDC transfers across these wallets, suggesting users recycled the same funds to inflate metrics. Despite high trading volume, the suspected accounts made little or no profit, pointing to a different motive altogether.Incentives, Not Profit, May Drive Fake TradesThe Columbia team believes the wash trading was not intended to earn money directly but to position traders for potential rewards such as token airdrops or platform rankings.Polymarket, which lets users bet on yes/no outcomes using the USDC stablecoin, charges no trading fees and doesn’t require identity verification — factors that may have made the platform especially vulnerable to this type of manipulation.The paper also notes that speculation around a forthcoming Polymarket token could have encouraged users to boost their trading statistics in anticipation of future distributions.Polymarket has faced manipulation claims before, especially around politically charged events like the U.S. presidential election. Not everyone agrees with the accusations. This article was written by Jared Kirui at www.financemagnates.com.

                                                                               BitGo’s move creates further competition in a burgeoning European crypto market that is expected to generate $26 billion revenue this year, according to one estimate.                     BitGo, a digital asset infrastructure company with more than $100 billion in assets under custody, has received an extension of its license from Germany’s Federal Financial Supervisory Authority (BaFin), enabling it to offer crypto services to European investors. The company said its local subsidiary, BitGo Europe, can now provide custody, staking, transfer, and trading services. Institutional clients will also have access to an over-the-counter (OTC) trading desk and multiple liquidity venues.The extension builds on BitGo’s previous Markets-in-Crypto-Assets (MiCA) license, also issued by BaFIN, and adds trading to the existing custody, transfer and staking services. BitGo acquired its initial MiCA license in May 2025, which allowed it to offer certain services to traditional institutions and crypto native companies in the European Union.Read more