Over $600 Million in Polymarket Election Trades Took Place After Races Ended

After Ethiopia’s election, trading continued even though Prime Minister Abiy Ahmed’s victory was effectively settled. Most of the activity focused on losing candidates, especially chief of staff Shimelis Abdisa. Bursts of trading continued for 123 days after the election, turning the market into what Rajiv Sethi calls a “zombie market.”

Romania produced a similar, and reportedly more dramatic, anomaly. Its initial election was canceled over fears of foreign interference. A new race took place months later, but Polymarket kept the original market open alongside the new option.

Researchers found signs that the activity was not ordinary political speculation. Sethi’s algorithm identified nearly all of the Romanian market’s volume as suspicious during certain weeks. In Ethiopia, about $284 million came from pairs of accounts repeatedly trading with each other. Polymarket said it flagged and blocked the accounts, but the platform did not explain why they traded so much before intervention.

The Ethiopian market handled more than $285 million in total trading. Yet only $173,000 was wagered on Abiy Ahmed winning. More than $41 million was traded on Shimelis Abdisa, who did not become the country’s leader. Nearly all the total volume therefore involved losing candidates.

The most striking detail was the source of that activity. About $284 million came from pairs of accounts repeatedly buying and selling with each other. Such back-and-forth transactions can inflate reported volume without showing genuine disagreement or interest in the election’s outcome.

Romania showed another large warning sign. Rajiv Sethi’s algorithm found that 99.6 percent of volume during certain weeks was wash trading. MSR Decode described Ethiopia’s activity as most likely “activity farming,” or artificially increasing trading volume. The possible motive was eligibility for a future Polymarket cryptocurrency token or token allocation, though trader identities remain unknown.

Polymarket kept Ethiopia’s market open because its rules set resolution for October, after the prime minister was formally appointed and sworn in. That deadline came months after Ahmed’s electoral victory was already all but certain. The market therefore remained tradable during a period when the practical outcome was clear.

Romania followed a different but related path. The initial election was called off because of fears about foreign interference. Rather than close that original market while the country prepared a new contest, Polymarket kept the old market open beside the new option.

The article does not give a fuller explanation for these platform decisions. It does show their effect: users continued trading after the relevant political situations had changed, and researchers detected suspicious activity. Ethiopia’s market stayed open for 123 days after the election, while the Romanian market accumulated weeks in which nearly all volume was identified as possible wash trading.

A “zombie market” is a prediction market that remains alive after the event it covers has already happened or is no longer unfolding. Traders can still buy and sell contracts because the platform has not formally resolved the market. The market’s activity can therefore outlast the real-world uncertainty.

Ethiopia illustrates the problem. Abiy Ahmed’s Prosperity Party won 438 parliamentary seats, while its closest competitor won 13. Ahmed’s victory was effectively settled, but Polymarket’s rules delayed resolution until he was formally appointed and sworn in. Trading bursts continued for 123 days afterward.

The result was a market that could display new prices and volume even though the central political question was largely decided. Users complained that it was not resolved. Sethi called it a “zombie market.” Such markets can create opportunities for pointless or artificial trading, especially when accounts repeatedly trade with one another after genuine uncertainty has disappeared.

Wash trading is market manipulation in which accounts repeatedly buy and sell assets to create the appearance of heavy activity. The trades may generate volume, but they do not necessarily represent independent traders changing their views. Money can simply circulate between accounts while the market looks active.

In the Ethiopian market, nearly $284 million came from pairs of accounts repeatedly buying and selling with each other. That pattern led Rajiv Sethi to call the activity an obvious form of volume manipulation. In Romania, his algorithm identified 99.6 percent of volume during certain weeks as wash trading.

The method can mislead observers who treat volume as evidence of strong public interest or informed disagreement. It is banned on regulated US financial exchanges and prohibited by Polymarket’s terms. Still, Sethi cautions that suspicious-looking activity is not always definitively wash trading because the traders’ identities are unknown.

Prediction markets are often promoted as barometers of public opinion and clearer guides to the future than polls. That claim depends on trades reflecting genuine beliefs. Suspicious activity undermines the connection between a market’s visible price or volume and what people actually think will happen.

The Ethiopia and Romania cases show the risk. Ethiopia recorded more than $285 million in trading, but nearly $284 million came from account pairs repeatedly trading with each other. In Romania, 99.6 percent of some weeks’ volume was identified as wash trading. Those figures can make a market appear influential without representing broad, independent participation.

The consequences include distorted signals, misplaced confidence, and difficulty interpreting prices or trading volume. Polymarket said it investigated and blocked the accounts, but did not explain why action came later. Because trader identities remain unknown, researchers cannot confirm every suspicious transaction. Stronger monitoring and timely resolution would matter for future credibility.

Prediction markets turn forecasts into contracts tied to specific future outcomes. Traders buy contracts when they think an outcome is likely and sell them when they change their minds or want to exit. The market price becomes a constantly changing signal of what participating traders collectively expect.

For example, a market might offer contracts on candidates becoming a country’s next leader. A rising price generally indicates stronger implied odds, while trading volume records the total value of contracts bought and sold. Once the event is officially resolved under the platform’s rules, contracts linked to the winning outcome receive the defined payout.

That system only works as an informative signal when trading reflects genuine beliefs. The article shows why resolution rules matter: Ethiopia remained open until formal appointment and swearing-in, despite a settled election. Repeated trades can also inflate volume, making the apparent market signal less trustworthy.