Researchers found 821 accounts that made $8.2 million manipulating bitcoin prices in the final seconds before Polymarket settled its short-dated contracts. The exploit involved a five-second window where traders could move spot bitcoin prices to influence the platform's time-weighted average price (TWAP) settlement mechanism. Polymarket has since implemented a fix to address the manipulation vector.

Exposes a structural vulnerability in TWAP-based settlement that could affect other crypto-native prediction markets. The fix and public disclosure may pressure competitors to audit their own settlement mechanisms before similar exploits emerge.