Key Points
- As it turns out, the Polymarket marketing head, Matthew Modabber, seems to have been let go by the company. At one point in time, he was an eleventh member of the team and had known Polymarket CEO Shayne Coplan since their schooling days at the Beacon School in Manhattan.
- However, the odd thing about this is that none of the $1.9 million wagers in the staged video trades has ever occurred. What’s more, the CFTC is still investigating the whole matter.
- As per sources, Modabber received a notice from lawyers to end the scam. But the current mystery is whether other people were aware of this fraud and did nothing.
A Crappy Salad Place, a PayPal Account & a School Pals Reunion
A PayPal account linked to the email of a salad joint sent over $2.5 million to hundreds of people. Yep, that’s Modabber controlling the account. Just a few days ago, the New York Post was splashing news that Polymarket had fired him as chief marketing officer. But, as yet, Polymarket are refusing to confirm the guy’s gone. And the findings of their internal review? Well, that’s still a tightly wrapped secret.
It all started earlier this year when investors got a few concerns. Apparently Polymarket launched an investigation after things just got too dodgy. According to the Post, the company is finalising a separation agreement. Modabber had been working at Polymarket since the start of 2024, by that time, he had already built a good reputation for himself.
The fact that the CEO had been so close friends with him is rather strange. It all began when they studied together at the Beacon School in Manhattan a number of years ago. Those close to the matter believe that their relationship is history, and it is an ‘as thick as thieves’ kind of situation. Dismissing a friend is never easy, but as an insider stated, Coplan was furious and threatened to dismiss the entire legal team on account of their demanding the dismissal of Modabber. But eventually, he regained his sanity and realised that it was for the better of the firm.
Of course, Coplan has not said anything on record regarding the matter but those around him say that eventually the board made up their mind on how to handle the whole affair. The board consists of the investor Nick Tomaino, attorney Alex Spiro and, of course, another prominent individual from Founders Fund.
What Exactly the Staged Videos Showed?
This whole mess came to light back in June 20 2026, when the Wall Street Journal took a close look at 1,105 videos from 10 various creators. These 10 people posted the videos between December 2025 and the middle of May. The weird thing is that none of the $1.9 million in bets shown on the videos was even real.
That $1.9 million figure is bets that appeared on the fake videos, not even real money the creators had won. The WSJ even found that in 118 of those videos, the winners had basically pocketed nearly $900,000 in fake winnings. On the actual market though, they would have lost over $166,000.
From what we know, the creators were being paid about $2,000 to $3,000 a month and were told to keep the arrangement under wraps. One of them even filmed a fake video on a lookalike website version, and one version even got the domain name wrong.
Polymarket said they still totally commit to keeping the markets “accurate, fair, and transparent”, and promised a comprehensive audit of active promotions. But you don’t see any of those audit results in this reporting.
Where the $2.5 Million Went?
Additional insights have come out in the payment records reviewed by Politico. Politico reveals that the personal account made payments exceeding $2.5 million to over 800 recipients from January 2025 to February 2026. $350,000 of the total amount was directed to creators whose identity is known to the company. According to Politico, the figure “is almost certainly an undercount”.
As per Politico, at least 20 creators were paid at least once to make 490 promotional posts on Polymarket on X without disclosing that they were paid partners of Polymarket. Approximately one-third of the posts included odds for bets as “BREAKING” or “NEW” updates.
Polymarket said that the influence partnership program was just part of the regular business practice. Nonetheless, Polymarket did not provide any explanation regarding disclosure obligations or reasons for using the personal account for payments. PayPal referenced its user agreement, in which personal accounts were defined as “intended primarily for personal, family, or household purposes”.
Pressure Had Been Building for Months
It should be noted that Polymarket had already experienced problems with regulators. In 2022, it agreed to pay a $1.4 million fine to the CFTC for operating the initial version of its platform. Later, it re-entered the market by acquiring a licensed exchange.
In June, Polymarket got yet another problem. On 26 June, the National Association of Consumer Advocates filed a complaint against Polymarket’s companies, Coplan and Modabber in the Superior Court of the District of Columbia. The lawsuit alleges that Polymarkets engaged in deceptive marketing targeted at college-age consumers. The allegations are unproven.
Changes inside the company followed in August. Polymarkets reorganised its marketing department and hired the founder of the e-scooter startup Bird to run the marketing division. As an insider said, it was just like a demotion of the previous marketing manager.
On 24 September, New York Attorney General Letitia James sued QCX LLC, doing business as Polymarket US. The lawsuit accuses the company of operating an illegal gambling business. It requests forfeiture of any illegal gains and payment of three times larger restitution and fines. All allegations are unproven.
Investors put additional pressure on Polymarket as well. According to Bloomberg, on 20 October, Founders Fund sought tighter financial controls before its investment in 2025.
What Happens Next?
There are many remaining questions. First, Polymarket has not yet announced a replacement or the results of the review. Second, the CFTC investigation and lawsuits have yet to be resolved.
The whole industry is keeping a close eye on the matter. Politico has pointed out that competitor Kalshi also uses influencers, meaning potential disclosure rules could apply to multiple companies.
Expert Analysis: Modabber’s Firing Does Not Answer the Questions Raised by His Actions
First, we start with chronology. The videos were released up to mid-May, but the incident came to light in June. Therefore, even though lawyers, if any, had told Modabber about his actions before this, the campaign would be able to continue its activities. It is Polymarket’s task to disclose whether any such warning was received.
Judging from Modabber’s profile on LinkedIn, he headed a team of more than 50 people, which consisted of marketing, partnerships, and growth workers. Normally, a team like that works together and not separately. As no one is being blamed here for knowing about or approving the partnership, the question remains unanswered by the board in our opinion.
Most alarming for us is the claimed danger to the legal team, mentioned above. Nevertheless, it is impossible to provide any kind of advice honestly while feeling under threat. However, this claim is made only by one anonymous source, and Coplan did not comment on this situation.
There will be various opinions about the reasons why Modabber was dismissed from the job. Some will regard it as a move done by the board as the truth came out. We suppose that the order is different: June’s disclosure, August’s dismissal, and October’s resignation from the company as there were discussions about its IPO. Thus, there is an attempt to restore the company’s reputation, rather than punishing anyone.
The only company, having access to all necessary data, is Polymarket. Then, what have they found in their promised audit of the promoted content?
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