On 3 October 2026, The Guardian revealed that the online prediction market Polymarket has been taking thousands of dollars in bets on whether some of the world’s largest banks will fail before the end of the year. The banks named in the positions include JP Morgan, BNP Paribas, HSBC and Lloyds Banking Group, with $77,507 in positions recorded on the platform. Residents of the United Kingdom, the United States, Canada and the European Union are barred from the offshore platform, yet punters from roughly 150 other countries can still take positions that pay out if a bank collapses. The United Kingdom’s Financial Conduct Authority told the newspaper it had been speaking to international regulators about prediction markets in order to protect market integrity, while a member of the Treasury committee warned that fast-growing bets of this kind could aggravate market sentiment and even trigger bank runs. No failure of any of the banks named has been established by any official source at the time of writing, no court has found that these bets amount to market manipulation, and the positions described remain small in scale. For readers with accounts, loans, investments or business in France, the question is concrete: what do French and European rules say when a foreign platform organises bets on the failure of banks that operate in France, and what protects money deposited in France if confidence wobbles.
I. Polymarket HSBC bets: can a prediction market bet a French bank into collapse?
The mechanism described by the British press is simple. Polymarket, a company based in the United States, offers contracts that pay out according to the outcome of real-world events. Alongside wagers on football matches and elections, the platform listed a market on whether the world’s biggest banks will go under by the end of the year. According to The Guardian, users had taken $77,507 worth of positions on that question, covering lenders from JP Morgan to BNP Paribas, including HSBC and Lloyds Banking Group. The company’s chief legal officer answered that the information in these markets is already public, that credit professionals have long had access to credit default swap markets, and that Polymarket merely simplifies the question for a wider audience while helping to fight disinformation. Academics quoted by the newspaper take the opposite view and warn of a moral hazard, arguing that the platform gives participants an incentive to rig the outcome of the contract. The British regulator is watching, the press reports, and members of parliament urge coordination with American counterparts. The Silicon Valley Bank and Credit Suisse failures of 2023, both accelerated by waves of speculation on social networks, are cited as the precedent everyone wants to avoid repeating. None of this establishes that a listed bank in France has suffered any harm, and none of it replaces the assessment of a court. It does, however, raise two precise legal questions under the law applicable in France: whether organising or amplifying bets on a bank failure can constitute market manipulation, and who is competent to act when the instruments concerned trade on a French venue.
A. Polymarket: how the bank-failure bets reported in London work and who can take them
A prediction market sells contracts whose value depends on a yes-or-no event. On the bank-failure market described on 3 October 2026, a user buys the “yes” side if they believe that a major bank will fail before 31 December, and the “no” side in the opposite case. The prices move with supply and demand, exactly like odds, and the holders of the winning side collect the payout. According to The Guardian, $77,507 in positions had been taken on that market, a modest amount next to the capitalisation of the banks concerned, but a visible one, because the contracts name individual institutions: HSBC, Lloyds Banking Group, BNP Paribas and JP Morgan among others. The Geo News analysis of the same affair asks the question bluntly: can you bet a bank into collapse, and do the wagers on HSBC raise a dangerous new question for regulators. The concern expressed by the Liberal Democrat member of the Treasury committee is that a market of this type could be exploited to aggravate genuine shifts in market sentiment, and that if activity on the bank-related contracts grew and then escalated rapidly, it could contribute to a bank run, meaning a sudden wave of withdrawals by worried customers. The newspaper recalls that customers withdrawing cash at speed had already been identified by the Bank of England as a risk for British banks, and that the 2023 episodes showed how fast speculation relayed on networks such as X and WhatsApp could accelerate a collapse. Access to the market is formally restricted: the platform states that residents of the United Kingdom, the United States, Canada and the European Union cannot bet on its offshore venue, which leaves participants from around 150 countries free to trade. For a French reader, that restriction matters twice. First, a person living in France who is tempted to open an account through a foreign connection should know that the platform is already blocked in France for gambling-law reasons, a situation examined in two earlier analyses of the blocking of Polymarket in France and the remedies against the regulator, and of the risks run by companies, influencers and affiliates that promote the blocked platform. Second, the fact that European residents are excluded does not remove the French legal issue, because the bets concern institutions that operate in France and instruments that trade on European venues, and European market-abuse rules apply to conduct relating to those instruments wherever the trader sits. The French regulator’s mandate is written in Article L. 621-1 of the Code monétaire et financier: « L’Autorité des marchés financiers, autorité publique indépendante, veille à la protection de l’épargne investie dans les instruments financiers, les unités mentionnées à l’ article L. 229-7 du code de l’environnement et les actifs mentionnés au II de l’article L. 421-1 du présent code donnant lieu à une offre au public ou à une admission aux négociations sur un marché réglementé et dans tous autres placements offerts au public. Elle veille également à l’information des investisseurs et au bon fonctionnement des marchés d’instruments financiers » (The Autorité des marchés financiers, an independent public authority, oversees the protection of savings invested in financial instruments and other public placements. It also oversees investor information and the orderly functioning of financial instrument markets.), published at Article L. 621-1 of the Code monétaire et financier. The wagers may be placed abroad, but their object includes a French bank whose shares are listed in Paris, and that single fact brings the affair within the reach of the Autorité des marchés financiers (AMF, the French financial markets regulator) and the criminal provisions of the Code monétaire et financier (the French Monetary and Financial Code) examined below. The amounts remain limited, the banks concerned have published no warning at the time of writing, and no authority has announced a formal finding of manipulation. The mechanism is nevertheless worth understanding in detail, because the line between a colourful bet and an unlawful manipulation depends on objective criteria written into European and French texts, not on the size of the stakes.
B. BNP Paribas, HSBC and Lloyds: why French and European law looks at the same bets
BNP Paribas is a French bank whose shares are admitted to trading on the regulated market of Euronext Paris. HSBC serves French customers through HSBC Continental Europe, its French subsidiary, and Lloyds Banking Group, although centred on the United Kingdom, belongs to the same European banking landscape whose stability the French authorities monitor with the Autorité de contrôle prudentiel et de résolution (ACPR, the French banking supervisor). When prediction contracts name these institutions and pay out on their failure, three bodies of rules potentially apply in France: the European regulation on market abuse, the French criminal provisions that mirror it, and the French system of banking supervision and depositor protection. The European Market Abuse Regulation, Regulation (EU) No 596/2014, known as MAR, defines market manipulation in its Article 12. The French text covers transactions, orders and any other conduct likely to give false or misleading signals as to the supply of, demand for or price of a financial instrument. The same article covers the dissemination of information: As restated by the Cour de cassation in its judgment of 14 February 2024 (Cass., Com., 14 February 2024, No. 22-10.472), « Selon l’article 12, paragraphe 1, sous c) du règlement MAR, aux fins de ce règlement, la notion de « manipulation de marché » couvre la diffusion d’informations, que ce soit par l’intermédiaire des médias, dont l’internet, ou par tout autre moyen, qui fixent ou sont susceptibles de fixer à un niveau anormal ou artificiel le cours d’un ou de plusieurs instruments financiers, alors que la personne ayant procédé à une telle diffusion savait ou aurait dû savoir que ces informations étaient fausses ou trompeuses. » (Under Article 12(1)(c) of the MAR Regulation, for the purposes of that regulation, market manipulation covers the dissemination of information, whether through the media, including the internet, or by any other means, which secures, or is likely to secure, the price of one or several financial instruments at an abnormal or artificial level, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading.)), Article 12 of Regulation (EU) No 596/2014 (CELEX:32014R0596). Article 15 adds a flat prohibition: As restated by the Cour de cassation, « Selon l’article 15 de ce règlement, une personne ne doit pas effectuer des manipulations de marché. » (Under Article 15 of that regulation, a person shall not engage in market manipulation.)), Article 15 of the same regulation (CELEX:32014R0596). A bet placed abroad on the failure of BNP Paribas could therefore be examined by the AMF where it concerns an instrument traded in Paris, and a coordinated campaign of rumours relayed on networks in order to move the price could be treated as the dissemination aspect of manipulation, provided the knowledge condition is met. The French criminal mirror is Article L. 465-3-2 of the Code monétaire et financier, which states: « Est puni des peines prévues au A du I de l’article L. 465-1 le fait, par toute personne, de diffuser, par tout moyen, des informations qui donnent des indications fausses ou trompeuses sur la situation ou les perspectives d’un émetteur ou sur l’offre, la demande ou le cours d’un instrument financier » (Any person who disseminates, by any means, information which gives false or misleading indications about the situation or prospects of an issuer or about the supply of, demand for or price of a financial instrument incurs the penalties set out in A of I of Article L. 465-1)), and adds: « La tentative de l’infraction prévue au I du présent article est punie des mêmes peines. » (The attempt to commit the offence defined in I of this article incurs the same penalties.), available at Article L. 465-3-2 of the Code monétaire et financier. The penalties are set by Article L. 465-1: « Est puni de cinq ans d’emprisonnement et de 100 millions d’euros d’amende, ce montant pouvant être porté jusqu’au décuple du montant de l’avantage retiré du délit, sans que l’amende puisse être inférieure à cet avantage » (The offence incurs five years’ imprisonment and a fine of 100 million euros, which may be increased to ten times the amount of the benefit derived from the offence, with the fine being no lower than that benefit), published at Article L. 465-1 of the Code monétaire et financier. These texts do not punish pessimism, humour or the mere purchase of a lawful contract. They punish, on the criminal side, the dissemination of information known to be false or misleading about an issuer or an instrument, and on the regulatory side, transactions and rumours likely to give false signals or to fix a price at an abnormal level. Applied to the affair reported from London, that distinction is the whole subject: the Polymarket contracts themselves, taken alone and at $77,507, would be difficult to present as moving the share price of BNP Paribas or HSBC, whereas an organised rumour campaign on networks, combined with leveraged bets on the failure market, could be examined as manipulation if the false character of the rumours and the state of mind of their authors were established. Only a court or the sanctions committee could make that finding, and no such finding exists at the time of writing.
II. Bank failure bets and your money in France: market manipulation rules tested in court and deposit protection you can rely on
French law has already been tested on facts close to those reported from London: false information about a French issuer, relayed at high speed, moving the market before the truth catches up. The outcome of that litigation frames everything a reader in France should understand about the Polymarket affair, and it leads directly to the practical question of what protects deposits held in France. The reasoning has two stages. First, the courts confirm that disseminating unverified information about a listed company can constitute market manipulation even when the person relaying it claims to be doing journalism, which sets the standard against which rumour-driven betting strategies will be judged. Second, the European and French systems guarantee deposits up to a harmonised ceiling and organise rapid repayment, which is the answer to the fear that a wave of bets could empty a bank overnight. The two stages point in the same direction: the law punishes those who manufacture panic, and it protects savers who keep their composure, verify their statements and assert their rights through the proper channels.
A. Market manipulation under French case law: the Bloomberg ruling and the insider-trading warning for prediction markets
On 22 November 2016 at 4:05 p.m., the Paris speed desk of the Bloomberg News agency received by email a press release presented as coming from Vinci, the French construction and concessions group whose shares trade on Euronext Paris, announcing a revision of its consolidated accounts. The agency relayed the information, the share price reacted, and the release turned out to be a fake. The commission des sanctions (the sanctions committee) of the AMF punished the agency, the Paris Court of Appeal confirmed in substance on 16 September 2021, and Bloomberg LP, an American company, appealed to the Cour de cassation (the French supreme court for civil and criminal matters). By a widely reported judgment of 14 February 2024, appeal No. 22-10.472, published in the Bulletin, the Commercial, Financial and Economic Chamber rejected the appeal, ordered Bloomberg LP to pay the costs, and ordered it to pay the AMF 3,000 euros under Article 700 of the Code of Civil Procedure: « REJETTE le pourvoi ; Condamne la société Bloomberg LP aux dépens », as recorded in Cour de cassation, Commercial Chamber, 14 February 2024, No. 22-10.472. The reasoning restates the European definition in full: « Selon l’article 12, paragraphe 1, sous c) du règlement MAR, aux fins de ce règlement, la notion de « manipulation de marché » couvre la diffusion d’informations, que ce soit par l’intermédiaire des médias, dont l’internet, ou par tout autre moyen, qui fixent ou sont susceptibles de fixer à un niveau anormal ou artificiel le cours d’un ou de plusieurs instruments financiers, alors que la personne ayant procédé à une telle diffusion savait ou aurait dû savoir que ces informations étaient fausses ou trompeuses. » (Under Article 12(1)(c) of the MAR Regulation, for the purposes of that regulation, market manipulation covers the dissemination of information, whether through the media, including the internet, or by any other means, which secures, or is likely to secure, the price of one or several financial instruments at an abnormal or artificial level, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading.)) The Court recalls the prohibition: « Selon l’article 15 de ce règlement, une personne ne doit pas effectuer des manipulations de marché. » (Under Article 15 of that regulation, a person shall not engage in market manipulation.)) It then examines Article 21 of the regulation, which requires that dissemination for journalistic purposes be assessed in light of the rules governing press freedom and the codes of the journalistic profession, unless the persons concerned derive a direct or indirect advantage from the dissemination. On the facts, the Court holds that urgency and the race for exclusivity do not override the duty to verify sources, citing the journalists’ charter, and it concludes that the sanction was compatible with freedom of expression because the exercise of that freedom carries duties and responsibilities, including the prevention of market disorder and the protection of the rights of others. The lesson for the Polymarket affair is direct. A professional relaying an unverified rumour about a French issuer was punished even though it invoked press freedom; a network user who knowingly spreads a false rumour about BNP Paribas while holding a “yes” position on a failure market would stand in a weaker position still, because the combination of the rumour and the financial interest points exactly to the conduct Article 12(1)(c) describes. Symmetrically, the mere holder of a pessimistic opinion, or of a lawfully purchased contract, who invents nothing and spreads nothing, does not meet the definition. A second precedent completes the picture on the insider-trading side, which the British press also raises about prediction markets. In its judgment of 23 December 2009 in Case C-45/08, Spector Photo Group, the Court of Justice of the European Union held that a person covered by the insider-dealing prohibition who holds inside information and acquires or disposes of the financial instruments concerned is presumed to have used that information, subject to the rights of the defence and in particular the right to rebut that presumption (CJEU, 23 December 2009, C-45/08, Spector Photo Group, CELEX:62008CJ0045). Anyone tempted to trade on a bank-failure market while holding non-public information about the bank concerned, for example an employee, an adviser or a service provider, should therefore understand that European law starts from a presumption of unlawful use, and that rebutting it is their burden. On the enforcement side, the AMF acts through its collège (the board), which notifies the objections, and its commission des sanctions, which rules after adversarial proceedings. Article L. 621-15 of the Code monétaire et financier sets the time limit: « La commission des sanctions ne peut être saisie de faits remontant à plus de six ans s’il n’a été fait pendant ce délai aucun acte tendant à leur recherche, à leur constatation ou à leur sanction. » (The sanctions committee may not be seized of facts going back more than six years where no step towards their investigation, recording or punishment was taken during that period.), available at Article L. 621-15 of the Code monétaire et financier. Readers who observe suspicious conduct, such as coordinated false rumours about a French bank combined with visible betting, can preserve the evidence, record dates, authors, screenshots and price movements, and bring the file to a lawyer who will direct it to the competent authority, because the six-year clock rewards early and documented reports.
B. Deposits in France: the 100,000 euro guarantee and the steps to take when your bank is named in failure bets
The fear that bets could empty a bank rests on a misunderstanding of how deposits held in France are protected. Since the European harmonisation, every depositor with an account in a credit institution authorised in France is covered by the French guarantee scheme, and the ceiling is the same across the Union. Article 6(1) of Directive 2014/49/EU on deposit guarantee schemes (CELEX:32014L0049) requires Member States to ensure that the aggregate deposits of each depositor are covered up to EUR 100,000 where deposits become unavailable. The limit applies per depositor and per institution, not per account, and it covers the aggregate of the accounts held by the same person in the same bank. Temporary high balances linked to defined life events, such as a private residential property transaction, can be protected above that ceiling for a limited period. The directive also shortened the repayment horizon, targeting seven working days (recital 38 of Directive 2014/49/EU, CELEX:32014L0049). In France, the system is operated by the Fonds de garantie des dépôts et de résolution (FGDR, the French deposit guarantee and resolution fund). Article L. 312-4 of the Code monétaire et financier makes membership compulsory: credit institutions, investment firms and financing companies authorised in France join the fund, which manages the deposit guarantee mechanism and the resolution financing arrangement, as set out at Article L. 312-4 of the Code monétaire et financier. Article L. 312-4-1 defines the scope: « La garantie des dépôts couvre, dans la limite d’un plafond, les fonds laissés en compte auprès d’un établissement de crédit et libellés en euros ou dans la devise d’un autre Etat » (The deposit guarantee covers, up to a ceiling, funds left in accounts with a credit institution and denominated in euros or in the currency of another State), available at Article L. 312-4-1 of the Code monétaire et financier. The trigger is set by Article L. 312-5: « Le mécanisme de garantie des dépôts est mis en œuvre sur demande de l’Autorité de contrôle prudentiel et de résolution lorsque celle-ci constate qu’un établissement de crédit n’est plus en mesure de restituer, immédiatement ou à terme rapproché, les fonds mentionnés au I de l’article L. 312-4-1 , et au plus tard cinq jours ouvrables après avoir établi pour la première fois que cet établissement de crédit ne les a pas restitués. » (The deposit guarantee mechanism is triggered at the request of the Autorité de contrôle prudentiel et de résolution where it finds that a credit institution is no longer able to repay, immediately or in the near future, the funds referred to in I of Article L. 312-4-1, and no later than five working days after it first established that the institution failed to repay them.)), and « L’intervention du fonds de garantie des dépôts et de résolution au titre du mécanisme de garantie des dépôts entraîne la radiation ou le retrait d’agrément de cet établissement » (The intervention of the fund under the deposit guarantee mechanism leads to the delisting or withdrawal of the institution’s authorisation.), published at Article L. 312-5 of the Code monétaire et financier. Concretely, a customer of BNP Paribas or of HSBC Continental Europe who reads that foreign punters are betting on the failure of their bank does not need to join a queue at the branch. The first step is to check the aggregate position per institution against the 100,000 euro ceiling and, where the ceiling is exceeded, to consider spreading balances across several institutions, since each institution opens a separate 100,000 euro coverage. The second step is to keep the account documentation, statements and general terms, because the signed contracts govern the relationship and prevail over any general commentary. The third step is to refuse to relay unverified failure rumours, because forwarding a rumour known to be false about a listed issuer can fall under the criminal provision quoted above, and even repeating it without verification can contribute to the panic the author seeks. The fourth step, for anyone who notices coordinated messages, suspicious price movements or an offer to share confidential information about a bank in exchange for a share of betting profits, is to preserve the evidence and have it examined by counsel with a view to a report to the AMF, whose sanctions committee can act within the six-year period recalled above. The fifth step concerns the temptation to bet from France: the platform is blocked on French territory for gambling-law reasons, and the consequences of that blocking for operators, promoters and intermediaries have been examined in the analyses of Polymarket’s challenge to its blocking in France and the remedies against the regulator and of the risks run by those who promote the blocked platform, so circumvention through foreign connections adds a legal risk to a financial one. None of these steps requires believing or disbelieving the bets. They require treating the bets for what they are at the time of writing: small, offshore, partly restricted positions, reported by the British press, with no official finding of wrongdoing and no established failure, managed within a European framework that punishes manufactured panic and guarantees deposits up to the harmonised ceiling.
Conclusion
The affair reported from London on 3 October 2026 is a stress test for two European promises: that markets cannot be rigged by rumour, and that savers do not pay for other people’s bets. On the first promise, the texts are explicit. Article 12 of Regulation (EU) No 596/2014 captures transactions, orders and conduct that give or are likely to give false or misleading signals, and it captures the dissemination of information, including rumours on the internet, by a person who knew or ought to have known of their falsity, while Article 15 prohibits market manipulation outright. Article L. 465-3-2 of the Code monétaire et financier punishes the same dissemination with the penalties of Article L. 465-1, up to five years’ imprisonment and 100 million euros, and the Cour de cassation confirmed in the Bloomberg judgment of 14 February 2024 that even a press agency invoking journalistic purposes can be punished for relaying unverified false information about a French issuer. The Spector presumption adds that whoever trades while holding inside information is presumed to have used it. On the second promise, the answer is arithmetic: 100,000 euros per depositor and per institution in the event of unavailability of deposits, with repayment within seven working days as the harmonised target, operated in France by the FGDR to which authorised institutions compulsorily belong. For the reader in France, the conduct to adopt follows from these two answers: verify balances against the ceiling, keep contractual documents, refuse to spread unverified failure rumours, preserve evidence of any coordinated campaign, and seek advice before any report or claim. At the date of writing, no official source has established any failure of BNP Paribas, HSBC or Lloyds, no court has characterised the reported $77,507 in positions as manipulation, and the signed contracts between each customer and their bank prevail over any general analysis. Only the competent authority and, ultimately, the judge can decide whether the line between betting and manipulation has been crossed.