It’s been less than eight weeks since an anonymous account on Polymarket netted over $400,000 after successfully predicting the Trump administration’s invasion of Venezuela and extraction of president Nicolás Maduro. The mysterious bettor doubled down on their wager mere hours before United States aircraft launched the offensive, which led to at least 80 civilian and military casualties.
It was an extremely suspicious situation in which it seems likely that somebody with insider information profited from deadly attacks — an egregious twist on warfare facilitated by a glaring regulatory vacuum that has yet to be meaningfully addressed.
Now that the Trump administration has attacked Iran, the situation is looking even worse. According to blockchain analytics company Bubblemaps SA, six Polymarket accounts made around $1.2 million in profit after successfully betting on the US striking Iran by the end of February, suggesting that an ethically appalling scheme is spreading behind closed doors.
As Bloomberg reports, all six accounts were created last month and exclusively bet on when Trump would strike the sovereign nation. The bets were made mere hours before the first bombs fell on Iran’s capital, Tehran.
While one account wasn’t always successful, betting that the US would take military action sooner, a subsequent bet of over $26,000 that the US would strike on Saturday won it more than $174,000.
Lawmakers were outraged by the news.
“It’s insane this is legal,” senator Chris Murphy (D-CT) wrote in a post on Bluesky. “People around Trump are profiting off war and death. I’m introducing legislation ASAP to ban this.”
Beyond those suspicious accounts, many other users were sucked into the fervor of betting on bloodshed in Iran. Polymarket saw trading volumes for a single contract about the timing of Trump’s strikes balloon to just shy of $90 million.
The instance highlights how prediction markets allow a huge chunk of their users to gamble on geopolitical speculation, while a select few with insider knowledge benefit far more.
“Prediction markets are some of the first products that allow direct bets on geopolitical events,” Bubblemaps CEO Nicolas Vaiman told Bloomberg. “In cases involving war or conflict, information can circulate within a broader circle before becoming public.”
Making matters worse is Polymarket facilitating anonymous betting through the use of cryptocurrencies, making instances of insider trading difficult to identify, let alone police.
“Combined with the fact that Polymarket generally only requires a wallet to trade, which allows for a high level of anonymity, this can create incentives for informed participants to act early,” Vaiman added.
Meanwhile, Polymarket’s biggest competitor, Kalshi, which is regulated by the US Commodity Futures Trading Commission (CFTC) and requires users to verify their identities, has taken a notably different approach. Just last week, the company cracked down on a video editor named Artem Kaptur, who works for James “MrBeast” Donaldson, YouTube’s most popular content creator, accusing him of insider trading and fining him over $20,000.
Over the weekend, Kalshi CEO Tarek Mansour announced that the company would void some bets on the ouster of Iran’s Supreme Leader Ali Khamenei, whose death in the strikes was confirmed over the weekend, arguing in a tweet that Kalshi doesn’t “list markets directly to death” and that “we design the rules to prevent people from profiting from death.”
“I know some of you disagree and prefer that we list these markets without a death carveout because it keeps the rules simple and because many traditional markets, like oil futures, can be proxy markets for war and death,” he added. “But we believe that’s different than having a market directly settling on someone’s death, which is not allowed for US regulated entities.”
Polymarket’s main trading platform is operating from outside the US and is technically not open to US-based customers after the CFTC fined the company $1.4 million during former president Joe Biden’s term in 2022 for operating as an unregistered derivatives market.
Whether that’s stopping people with insider Pentagon knowledge from profiting seems dubious at best. And the Trump administration’s Justice Department and CFTC quietly ended their respective investigations into the company without bringing any charges in July of last year, indicating regulators are extremely unlikely to step in any time soon.
More on insider trading: Kalshi Says It’s Busted a MrBeast Staffer for Insider Trading
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