Amid escalating tensions, six traders on the prediction market platform Polymarket made a killing by accurately forecasting a U.S. strike on Iran, netting a staggering $1 million in profits. The timing and precision of their bets have raised eyebrows and stoked suspicions of insider trading, according to data from analytics firm Bubblemaps SA.
The six wallets, all created in February, placed the majority of their activity on contracts predicting a potential U.S. attack. Shares were purchased for as little as $0.10, mere hours before explosions were reported in Tehran, Bloomberg reported. Onchain investigators noted that the pattern of activity closely resembles behavior linked to suspected insider activity on prediction markets.
High Stakes and High Suspicion
“In cases involving war or conflict, information can circulate within a broader circle before becoming public,” Nicolas Vaiman, CEO of Bubblemaps, explained. “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,” he added.
The specific contract predicting a strike by February 28 attracted over $90 million in trading volume, making it the most popular among traders. The total volume for strike-related contracts on Polymarket during this period reached $529 million, underscoring the platform’s role in high-stakes geopolitical betting.
Previous Incidents and Regulatory Scrutiny
This is not the first time Polymarket has faced allegations of insider trading. Recently, a small cluster of crypto wallets earned over $1.2 million by betting on a contract tied to an onchain investigation into DeFi platform Axiom, shortly before the investigation was made public. Another notable instance involved a Polymarket account making about $400,000 from a timely wager on the capture of Venezuelan President Nicolás Maduro.
These repeated incidents have caught the attention of regulators. U.S. Representative Ritchie Torres is drafting legislation called the Public Integrity in Financial Prediction Markets Act of 2026, aimed at curbing insider trading on prediction platforms. The bill would prohibit elected officials, political appointees, and executive-branch employees from trading contracts tied to government policy or political outcomes when they possess nonpublic information.
Global Regulatory Actions
Polymarket has also faced a wave of regulatory actions worldwide. Several countries, including the Netherlands, Hungary, Belgium, France, Italy, Romania, Poland, Singapore, and Portugal, have either blocked or banned the platform, classifying its event-based contracts as unlicensed online gambling rather than financial trading.
Despite these challenges, the platform continues to attract significant attention and trading volume, highlighting the complex interplay between prediction markets, geopolitical events, and regulatory oversight.
Looking Forward
As tensions between the U.S. and Iran continue to simmer, the scrutiny on prediction markets like Polymarket is likely to intensify. The balance between allowing market-driven forecasts and preventing insider trading remains a delicate one, with regulators and market participants alike navigating uncharted territory. The future of these platforms will depend on how effectively they can address these concerns while maintaining their role in providing valuable insights into global events.
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