Polymarket's Top Trading Bot Polycule Hacked, How Should Prediction Market Projects Enhance Security Measures?
- Core Viewpoint: Telegram trading bots have severe security shortcomings.
- Key Factors:
- Servers centrally store user private keys, making them vulnerable to mass theft.
- Authentication relies on Telegram accounts, posing a high risk of SIM swapping attacks.
- Transactions lack local confirmation; backend logic vulnerabilities can lead to automatic fund transfers.
- Market Impact: Triggered widespread concern and scrutiny over the security of similar bots.
- Timeliness Note: Short-term impact
1. Event Summary
On January 13, 2026, Polycule officially confirmed that its Telegram trading bot was hacked, resulting in the theft of approximately $230,000 in user funds. The team provided rapid updates on X: the bot was taken offline immediately, a patch was being expedited, and they promised compensation for affected users on the Polygon side. The series of announcements from last night through today has intensified discussions on security within the Telegram trading bot sector.
2. How Polycule Operates
Polycule's positioning is clear: enabling users to browse markets, manage positions, and handle funds on Polymarket directly within Telegram. Its main modules include:
Account Creation & Dashboard: `/start` automatically assigns a Polygon wallet and displays the balance; `/home` and `/help` provide entry points and command instructions.
Market Data & Trading: `/trending`, `/search`, or directly pasting a Polymarket URL can fetch market details; the bot supports market/limit orders, order cancellation, and chart viewing.
Wallet & Funds: `/wallet` allows viewing assets, withdrawing funds, swapping POL/USDC, and exporting private keys; `/fund` guides the deposit process.
Cross-Chain Bridging: Deeply integrated with deBridge, it helps users bridge assets from Solana, automatically deducting 2% of SOL to convert to POL for Gas.
Advanced Features: `/copytrade` opens the copy trading interface, allowing users to follow trades by percentage, fixed amount, or custom rules, with additional capabilities like setting pauses, reverse copy trading, and strategy sharing.
The Polycule Trading Bot handles user conversations, parses commands, and also manages keys, signs transactions, and continuously monitors on-chain events in the background.
After a user inputs `/start`, the backend automatically generates a Polygon wallet and stores the private key. Users can then send commands like `/buy`, `/sell`, `/positions` to check markets, place orders, and manage positions. The bot can also parse Polymarket webpage links, directly returning trading entry points. Cross-chain funds rely on integration with deBridge, supporting the bridging of SOL to Polygon, with 2% of SOL automatically converted to POL for subsequent transaction Gas fees. More advanced features like Copy Trading, limit orders, and automatic monitoring of target wallets require the server to be online for extended periods and continuously sign transactions on behalf of users.
3. Common Risks of Telegram Trading Bots
Behind the convenient chat-style interaction lie several hard-to-avoid security weaknesses:
First, almost all bots store user private keys on their own servers, with transactions signed directly by the backend. This means that once a server is compromised or data is leaked due to operational negligence, attackers can export private keys in bulk and drain all user funds at once. Second, authentication relies on the Telegram account itself. If a user falls victim to SIM swapping or device loss, attackers can control the bot account without needing the seed phrase. Finally, there is no local pop-up confirmation step—traditional wallets require user confirmation for every transaction, but in bot mode, if there's a flaw in the backend logic, the system could automatically transfer funds without the user's knowledge.
4. Unique Attack Vectors Revealed by Polycule's Documentation
Based on the documentation, it can be inferred that this incident and potential future risks are mainly concentrated in the following areas:
Private Key Export Interface: The `/wallet` menu allows users to export private keys, indicating that the backend stores reversible key data. Once vulnerabilities like SQL injection, unauthorized interfaces, or log leaks exist, attackers can directly call the export function—a scenario highly consistent with this theft.
URL Parsing Potentially Triggering SSRF: The bot encourages users to submit Polymarket links to get market data. If input is not rigorously validated, attackers could forge links pointing to internal networks or cloud service metadata, tricking the backend into "stepping into a trap" to further steal credentials or configurations.
Copy Trading Monitoring Logic: Copy trading means the bot will synchronize operations with a target wallet. If monitored events can be forged, or if the system lacks security filtering for target transactions, copy trading users could be led into malicious contracts, with funds locked or directly drained.
Cross-Chain & Automatic Token Swap Process: The automatic process of converting 2% of SOL to POL involves exchange rates, slippage, oracles, and execution permissions. If code validation for these parameters is not strict, hackers could amplify exchange losses during bridging or divert Gas budgets. Additionally, inadequate verification of deBridge receipts could lead to risks of fake deposits or duplicate credits.
5. Reminders for Project Teams and Users
Actions project teams can take include: delivering a complete and transparent technical post-mortem before resuming service; conducting specialized audits on key storage, permission isolation, and input validation; reassessing server access controls and code release processes; and introducing secondary confirmation or limit mechanisms for critical operations to mitigate further damage.
End users should consider controlling the amount of funds held in bots, promptly withdrawing profits, and prioritizing security measures like enabling Telegram's two-factor authentication and independent device management. Until the project team provides clear security commitments, it's advisable to wait and observe, avoiding additional principal investments.
6. Postscript
The Polycule incident serves as another reminder: when the trading experience is compressed into a chat command, security measures must be upgraded simultaneously. Telegram trading bots will likely remain popular gateways for prediction markets and Meme coins in the short term, but this space will also continue to be a hunting ground for attackers. We recommend that project teams treat security development as an integral part of the product, publicly sharing progress with users; users should also remain vigilant and not treat chat shortcuts as risk-free asset managers.
At ExVul Security, we focus long-term on offensive and defensive research for trading bots and on-chain infrastructure, offering security audits, penetration testing, and emergency response services for Telegram trading bots. If your project is in the development or launch phase, feel free to contact us anytime to eliminate potential risks before they materialize.
About ExVul
ExVul is a Web3 security company offering services including smart contract audits, blockchain protocol audits, wallet audits, Web3 penetration testing, security consulting, and planning. ExVul is committed to enhancing the overall security of the Web3 ecosystem and remains at the forefront of Web3 security research.
