Top-tier Trading Bot Polycule on Polymarket Hacked, How Should Prediction Market Projects Strengthen Security Measures?
- Core Viewpoint: Telegram trading bots have serious security shortcomings.
- Key Factors:
- Servers centrally store user private keys, making them vulnerable to mass theft.
- Reliance on Telegram account authentication makes them susceptible to SIM swap attacks.
- Transactions lack local confirmation; backend logic vulnerabilities can lead to automatic fund transfers.
- Market Impact: Triggered widespread concern over the security of the Telegram Bot sector.
- Timeliness Note: Short-term impact.
1. Incident 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 fix is being urgently developed, and affected users on Polygon will be compensated. The series of announcements from last night through today has intensified discussions about security in the Telegram trading bot space.
2. How Polycule Operates
Polycule's positioning is clear: to enable users to browse markets, manage positions, and handle funds on Polymarket directly within Telegram. Its main modules include:
Account Setup & 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` supports viewing assets, withdrawing funds, POL/USDC swaps, and exporting private keys; `/fund` guides the deposit process.
Cross-Chain Bridging: Deeply integrated with deBridge, helping users bridge assets from Solana, with 2% of the SOL automatically deducted and converted to POL for Gas by default.
Advanced Features: `/copytrade` opens the copy trading interface, allowing users to follow trades by percentage, fixed amount, or custom rules, with additional capabilities like pausing, reverse copying, and strategy sharing.
The Polycule Trading Bot handles user conversations, parses commands, and also manages private 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`, and `/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 the SOL automatically converted to POL to pay for subsequent transaction Gas. More advanced features include Copy Trading, limit orders, and automatic monitoring of target wallets, which 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 security vulnerabilities that are difficult to avoid:
First, almost all bots store user private keys on their own servers, with transactions signed directly by the backend. This means that once the 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, an attacker 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 is 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, we can infer 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. If vulnerabilities like SQL injection, unauthorized interfaces, or log leaks exist, attackers could 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 strictly 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 the 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 process of automatically converting 2% of SOL to POL involves exchange rates, slippage, oracles, and execution permissions. If the code's validation of these parameters is not rigorous, hackers could amplify exchange losses or divert Gas budgets during bridging. Additionally, inadequate verification of deBridge transaction 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; revisiting server access controls and code deployment processes; and introducing secondary confirmation or limit mechanisms for critical operations to mitigate further damage.
End users should consider controlling the amount of funds kept in the bot, 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 adding more principal.
6. Afterword
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 a popular entry point 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 and transparently share 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. We offer security audits, penetration testing, and emergency response services specifically for Telegram trading bots. If your project is in the development or launch phase, feel free to contact us at any time to eliminate potential risks before they materialize.
About ExVul
ExVul is a Web3 security company. Our services cover 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 consistently stays at the forefront of Web3 security research.
