Fraudsters are exploiting the increased public interest in prediction markets such as PolyMarket and Kalshi, according to researchers at Recorded Future. Criminal groups known as “traffers” are providing fellow crooks with “websites, administrative panels, cryptocurrency payment infrastructure, victim-management capabilities, technical support, and promotional guidance” to target users of prediction markets.
“This model lowers barriers to entry for affiliates and enables campaigns to scale rapidly as new trends attract potential victims,” Recorded Future says. “The services combine convincing prediction-market interfaces with established fraud mechanisms designed to manipulate victims and prevent them from recovering deposited funds. These mechanisms include controlled trading outcomes, fabricated market activity, artificial withdrawal restrictions and fees, and the collection of sensitive identity and payment information.”
The attackers are using AI tools to accelerate their operations by “reducing the time, cost, and expertise required to adapt campaigns to emerging events.” Recorded Future warns that attackers are now able to exploit current trends faster than ever before, as AI supercharges their development.
“The rapid adoption of prediction markets by multiple traffer teams illustrates a broader threat from mature fraud ecosystems that can pivot toward emerging technologies, financial products, and cultural trends without having to develop entirely new criminal capabilities,” the researchers write. “Prediction markets are particularly well-suited to this model because legitimate platforms already combine cryptocurrency, speculative financial activity, rapidly changing news events, and social media discussion. Fraud actors can imitate these characteristics to establish credibility and manufacture urgency. As the fraudulent prediction markets gain visibility, additional traffer teams may experiment with the prediction market theme or reuse the underlying tooling for adjacent fraud schemes.”
Recorded Future has the story: https://www.recordedfuture.com/research/prediction-markets-traffer-teams
