Nocturnal 
Punters on the prediction betting site Polymarket have been wagering real money on whether HSBC and Lloyds could collapse before the end of the year, sparking calls for UK regulators to step in.
The platform, which lets users bet on everything from football results to whether aliens exist, has taken in $77,507 (£58,530) worth of positions on whether some of the world’s biggest banks will fail by the end of 2026. That list includes JP Morgan and BNP Paribas alongside two household names on the British high street: HSBC and Lloyds Banking Group.
As first reported by The Guardian, the revelation has reignited concerns about the impact unregulated prediction markets could have on the stability of the financial system.
Who can actually place these bets?
Residents of the UK, US, Canada and the EU are officially barred from betting on Polymarket’s offshore platform. But that still leaves punters in roughly 150 other countries free to profit from events that would cause serious financial turmoil and threaten entire economies if they came true.
The Financial Conduct Authority (FCA) told the Guardian it has been in contact with international regulators about prediction markets as part of wider efforts to protect “market integrity”. It’s a clear sign that UK watchdogs are taking the issue seriously, even though Britons aren’t supposed to be able to bet on the site themselves.
Bobby Dean, a Liberal Democrat MP who sits on the Treasury committee, said the authorities needed to act now rather than wait for a crisis.
“Polymarket has a poor reputation for stopping insider trading or bad actors placing bets on their platform, so it’s easy to see how it could be exploited to try to aggravate real shifts in market sentiment,” Dean said.
“If the bank-related activity grows on the platform and then a particular market was to escalate rapidly, it could even trigger bank runs. I would urge our regulators to get in contact with their counterparts in the US to raise concerns. We should not turn a blind eye to the risks because they are relatively small today, we’ve all seen how quickly things can move in this sector.”
Why banks are already on edge
The banking industry has already been warned to prepare for the risk of social media-fuelled bank runs, where customers rush to withdraw their cash at speed. Silicon Valley Bank and Credit Suisse both collapsed in 2023 after stock sell-offs and bank runs that were accelerated by a wave of speculation on platforms such as X and WhatsApp.
Polymarket has faced similar questions before. Newly created accounts were found to have made highly specific, well-timed bets ahead of a US-Iran ceasefire announcement, with analysis of blockchain data showing at least 50 wallets placing substantial bets shortly before the deal was confirmed. The Financial Times separately reported that unusually large, well-timed bets ahead of a US attack on Iran made a combined profit of $330,000 for 12 suspicious accounts. The FT also revealed that a long-term aide to Nigel Farage, George Cottrell, had a secret Polymarket account that received nearly $20m in bets on Trump’s election victory.
Polymarket’s defence
Polymarket’s bosses insist there’s nothing wrong with allowing bets on bank failures. The company’s chief legal officer, Neal Kumar, argued the platform was simply “democratising” markets that used to be the preserve of elite traders and institutions.
He pointed out that “banks, hedge funds and credit professionals have had access to credit default swap markets for years,” suggesting the information behind these bets is already public.
For now, the bets remain live and no UK regulatory action has been confirmed. But with the FCA already talking to overseas counterparts and MPs calling for stronger scrutiny, pressure on Polymarket looks set to grow in the weeks ahead.
