Polymarket faces scrutiny over suspected insider betting activity

The report said more than 80 accounts displayed suspicious betting patterns over the past two years, including highly timed trades linked to events such as Israeli military action against Iran and major political developments.

Large profits from well-timed geopolitical bets

One example highlighted involved a group of users who reportedly wagered heavily that Israel would strike Iran in June 2025 despite low market expectations at the time.

Following the attack, the accounts collectively earned hundreds of thousands of dollars in profits. Several of the accounts had reportedly been created only days before the bets were placed, raising concerns among analysts and regulators.

Researchers and analysts tracking blockchain-based prediction markets said patterns including newly created accounts, repeated wins on niche geopolitical topics and consistently profitable “long-shot” bets may indicate access to nonpublic information.

Military-linked cases increase pressure

Scrutiny intensified after US prosecutors charged a Special Forces soldier with illegally profiting from wagers connected to a military operation involving former Venezuelan leader Nicolas Maduro.

According to prosecutors, the soldier allegedly used classified operational knowledge to place successful bets on political and military outcomes, earning more than $400,000. The case marked one of the first criminal insider-trading prosecutions linked to prediction markets.

Prediction markets under regulatory spotlight

Prediction platforms such as Polymarket and Kalshi have rapidly expanded in popularity, with combined monthly trading volumes reportedly reaching tens of billions of dollars.

The growth has fueled debate among regulators, academics and financial institutions over whether such platforms could be exploited by individuals with privileged access to government, military or corporate information.

Polymarket has said insider trading has “no place” on its platform and announced enhanced monitoring systems aimed at detecting suspicious activity. The company recently partnered with blockchain analytics firms to strengthen market surveillance and cooperate with law enforcement when necessary.

Researchers warn of broader systemic risks

Several recent academic studies have also identified abnormal trading behavior across prediction markets, though researchers noted that suspicious patterns alone do not definitively prove insider trading.

Experts warn that as prediction markets increasingly intersect with politics, military operations and financial events, platforms may face tighter regulation and stronger compliance requirements in the future.