But analysts from two crypto research firms have found evidence of rampant wash trading on Polymarket, even as its opportunities have been widely shared across social media and mainstream media. According to the platform, Donald Trump currently has a 67% chance of winning.

In separate studies conducted by blockchain companies Chaos Labs and Inca Digital and shared exclusively with Fortune, Analysts found that Polymarket activity showed signs of wash trading, a form of market manipulation in which shares are often bought and sold simultaneously and repeatedly to create a false impression of volume and activity. Chaos Labs found that wash trading made up about a third of trading volume on Polymarket’s presidential market, while Inca Digital found that a “significant portion of the volume” in the market could be attributed to potential wash trading, the report said.

This story appeared in The Readera weekly newsletter with the biggest stories from Fortune. Sign up here.

While other prediction markets, including Kalshi and Robinhood, have launched in the US since a pivotal court ruling legalized electoral betting in September, Polymarket remains by far the largest platform, thanks in part to its crypto-native design and offshore operations. Polymarket remains inaccessible to US investors. Still, with less than a week until Election Day, the suspicious activity on Polymarket is raising questions about the veracity of the site, which, as its 26-year-old founder Shayne Coplan has touted, can “demystify the real-world events going on matter the most. for you.”

“Polymarket’s terms of use expressly prohibit market manipulation,” a Polymarket spokesperson said in a statement Fortune after publication. “We strive to provide users with the most honest analysis possible and our transparency allows the market to decide.”

The rise of prediction markets

Founded in 2020 and backed by venture capital funds including Peter Thiel’s Founders Fund, Polymarket tried to launch electoral betting in the US before being forced abroad by the Commodity Futures Trading Commission in early 2022.

Unlike competitors like PredictIt and Kalshi, which recently prevailed in a lawsuit against the CFTC to operate in the US, Polymarket runs its platform on the Ethereum-based blockchain Polygon. Coplan says the crypto element provides greater insight into his trading activities. “The great thing about Polymarket is that it’s all peer-to-peer and transparent,” he recently posted on X.

Polymarket volume exploded during the recent presidential election, with outlets emerging from the Wall Street Journal Unpleasant Fortune reporting the betting odds on its platform alongside more traditional metrics such as polling data. In a sign of the increased credibility surrounding prediction markets, pollster Nate Silver joined Polymarket as a consultant in July.

Polymarket’s crypto design and offshore operations have drawn criticism from other quarters. This includes recent reports alleging manipulative trading on the site – most notably by a single French trader who allegedly helped boost Trump’s odds. Polymarket has insisted that the user has “extensive trading experience” and was not trading nefariously.

Was trading

The evidence of wash trading appears to be a serious sign of misconduct on the platform. To conduct its analysis, Chaos Labs looked at on-chain data to isolate high-volume traders, filtering out users who were likely engaged in normal activities like market making. It then separated users who showed signs of wash trading, examining their ratio of buy to sell orders and taking into account their shareholdings compared to their trading volume. Chaos Labs concluded that about a third of the trading volume – and total number of users – on the Presidential Market alone was likely wash trading, as well as on all markets.

This practice is common in crypto applications, and especially those with the potential for future token launches and airdrops, where users often earn tokens based on activity. The Information reported in September that Polymarket has explored launching its own token.

“The challenges of prediction markets are no different than those of any other application with a market,” said Omer Goldberg, the founder of Chaos Labs, which is backed by Haun Ventures and develops data integrity software. “Wash trading is not specific to Polymarket.”

Trading volume

Both Chaos Labs and Inca Digital discovered another anomaly on Polymarket: the alleged trading volume on the Presidential Market, reported in US dollars on Polymarket’s website, does not match the on-chain data. Inca found that the actual transaction volume in the presidential betting market was approximately $1.75 billion, compared to Polymarket’s reported figure of $2.7 billion.

Chaos Labs attributed this to Polymarket confusing traded stocks with US dollars. To put it more plainly, users can buy shares of candidates at different odds. A “yes” share of Hillary Clinton for president costs just $0.01, given how unlikely she will be elected, but Chaos Labs found that Polymarket reports that share as $1 in volume.

This discrepancy, along with the wash trading, underscores the untested nature of a platform that many rely on for presidential election signals.

However, Polymarket’s decision to operate on blockchain rails also means that researchers like Chaos Labs and Inca Digital can analyze activity. Coplan has described users’ ability to control Polymarket as a “feature, and not a bug.”

“These companies want to attract real users and build trust in their markets,” Goldberg said. “Identifying and reducing wash trading is critical to ensuring that prediction markets are representative of everyone, with market prices and volumes determined by an authentic, sustainable user base rather than confused by inorganic flow.”