As US and Israeli bombs fell on Iran this weekend, bettors on Polymarket — where $529 million was traded on contracts tied to the timing of the strikes — were cashing in. Almost immediately, blockchain sleuths began hunting for unusual patterns in recent bets.
Six accounts on Polymarket made around $1 million in profit by betting on the US to strike Iran by Feb. 28, according to analytics firm Bubblemaps SA. The accounts were all freshly created in February and had only ever placed bets on when US strikes might occur. Some of their shares were purchased, in some cases at roughly a dime apiece, hours before the first explosions were reported in Tehran.
These are the hallmarks that blockchain analysts associate with insider trading in prediction markets, an industry without widespread oversight and no agreed-upon methodology for distinguishing luck from leaks — and they’re far from conclusive on their own. Similar patterns suggested that an insider made a big profit betting on the ouster of Venezuela’s Nicolás Maduro in January, and have also been used to identify several other cases of alleged insider trading.
By the time the Feb. 28 contract resolved on Saturday, it had attracted around $90 million in trading volume since its creation — making it by far the most popular date for a strike on the platform. The next most traded was a contract for an attack by Jan. 31, which had drawn $42 million.
Polymarket, one of the largest prediction markets platforms, has become a sprawling, largely unregulated clearinghouse for geopolitical speculation, where the line between informed conviction and privileged knowledge is increasingly hard to draw. Polymarket didn’t immediately respond to a request for comment on Saturday.
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“Prediction markets are some of the first products that allow direct bets on geopolitical events,” said Nicolas Vaiman, chief executive officer of Bubblemaps, in an email. “In cases involving war or conflict, information can circulate within a broader circle before becoming public. 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.”
As the strikes continued over the weekend, Polymarket had already opened new contracts for traders to bet on — among them whether a Gulf state would strike Iran within a week, and whether the US would hit neighboring Iraq by the end of March. All have netted minimal volume thus far.
Some of the bets identified by Bubblemaps drew additional scrutiny on social media, where users were quick to label them as suspected insiders. The picture is far murkier than that. The US had been telegraphing military action for weeks, drawing in speculators. A contract tracking possible strikes for Feb. 27 — just one day earlier — attracted more than $25 million in volume.
Not all of the accounts were successful, either. One of the six accounts had previously bet around $800 on the US to take military action sooner, losing around $300 in the process. A $26,513 bet that the US would strike on Saturday — by far the account’s largest wager — won its owner more than $174,000.
In an environment where US strikes had been openly discussed for months, the pool of people willing to make an aggressive, well-informed wager was large. Whether any crossed the line from conviction into privileged knowledge is a question the blockchain alone cannot answer.
The timing of US military action wasn’t the only Polymarket contract to draw speculation about possible insider activity. In mid-January, Polysights, another analytics firm, noted a cluster of one-sided activity around a market tracking whether Ali Khamenei would no longer be supreme leader of Iran by the end of March.
At the time, traders put the likelihood at 40% — but almost 90% of possible insider transactions tracked by Polysights supported the outcome. Those accounts also fit the profile that blockchain detectives have built up as telltale signs of alleged insiders.
The terms of the Khamenei contract do not exclude his death as a qualifying event — an omission that has drawn criticism from those who argue it effectively places a financial incentive on assassination.
Kalshi Inc., a Commodity Futures Trading Commission-regulated rival, said Saturday it does not offer markets that settle on death. In the event of Khamenei’s death, it said it would resolve its contract based on the last price offered.
Polymarket’s main trading platform is situated offshore and does not accept US-based customers, placing it outside the CFTC’s oversight. The company has argued that its contracts provide valuable data because they crowdsource information in volatile situations and help the public gauge risk, especially when conventional reporting lags.
The Iran bets are the latest in a string of well-timed prediction-market wagers around sensitive events. Earlier in February, Israeli authorities filed what appear to be the first criminal charges anywhere in the world linking prediction-market bets to classified military intelligence. An Israeli military reservist and a civilian were indicted for allegedly using secret operational information to place Polymarket wagers on Israeli security operations last year, earning roughly $150,000.
Kalshi recently disclosed its first public enforcement actions against two customers who were suspected of using insider information when betting. The company suspended and fined an editor for YouTube star MrBeast, who Kalshi said had used his knowledge of unaired show content to place bets.
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