Competitors spread rugpull FUD as Polycule Polymarket bot goes offline

With no updates from the Polycule team and users still unable to withdraw their funds, competitors have already started to declare what Polycule described as a hack incident as a “rug pull” almost one week since the project went mute.

When Polycule, one of the largest automated trading bots for the Polymarket prediction market platform, announced on January 7, 2026, that it had been hacked, affecting approximately $230,000 in user funds, the incident appeared to be another unfortunate but not uncommon security breach in the frontier world of cryptocurrency infrastructure.

The team promised patches and a security audit by the weekend. It is also committed to compensating affected users through treasury funds.

However, as of Monday, January 12, 2026, with no updates from the team, competitors have declared Polycule a rug pull and have started to launch promotional campaigns to capture displaced users.

Was Polycule hacked or rugpulled?

Ryan Chi, founder of rival platform Insiders.bot, moved to shape the narrative. In a post on X, he wrote, “Today, a group member shared news that one of the largest trading bots, Polycule @pmx_trade, has been confirmed to have rugged.”

Chi later went on to state that the platform has not shared any news since the weekend, users cannot withdraw their funds, and described the incident in the same sentence as a suspected case of “rug pull and run.”

Within the same post, Chi announced that his platform would offer a 50% discount on first-month memberships to affected Polycule users, positioning Insiders.bot as the ecosystem’s rightful heir.

“Now that Polycule has fallen, someone must fill this gap in the ecosystem,” Chi wrote. “I believe we are the right ones to do it.”

Insiders.bot’s X account announced lower fees and discount codes for impacted users while describing the situation as “unfortunate” but framing those “who remain” as rebuilding the space.

Insiders.bot had posted earlier that it had nothing to do with Polycule’s hack, adding that none of its founders are the purported hacker.

How safe are trading bots on prediction markets?

Automated trading bots are a segment of the cryptocurrency ecosystem, but the sector remains largely unregulated, with inherent custodial risks.

Recent reports show that dozens of bots are now quietly farming Polymarket’s short-term Bitcoin markets, many generating monthly profits in the tens of thousands. The success has intensified competition among bot providers, creating powerful incentives to eliminate rivals.

What actually constitutes a rug pull, however, is more complex than community usage suggests. While the operational silence from Polycule following its hack announcement is very much similar to troubling patterns in previous DeFi exploits, legitimate projects have faced similar accusations during extended downtime or technical difficulties.

Will affected users get compensated?

For affected users, the lack of clarity offers little comfort. Those seeking to document holdings in hopes of potential recovery have shared wallet addresses publicly, though no recovery mechanism currently exists.

Insiders.bot has asked those affected to register their losses, adding that they will share compensation within one to two weeks.

However, it can be said that the incident has already damaged confidence in third-party Polymarket bots, with some users declaring that they will avoid automated services entirely.

Also, the absence of clear authority in this space creates an opening for both innovation and exploitation, and in some cases allows competitors to serve as judge, jury, and beneficiary when projects falter. Until Polycule breaks its silence or independent analysis provides clarity, users who are already left to speculate may continue to lean more towards Mr. Chi’s conclusions.