In the hours before the United States and Israel launched a joint military strike on Iran on February 28, a small group of traders on Polymarket seemed to already know the outcome before a single bomb was dropped or President Trump announced the operation publicly.
The strikes, codenamed Operation Epic Fury, killed Iranian Supreme Leader Ayatollah Ali Khamenei, resulted in a windfall for several Polymarket users who had placed a “YES” bet on “Will the US strike Iran by February 28, 2026?” The six accounts in question were funded within 24 hours of the attack and netted $1.2 million, according to blockchain analytics firm Bubblemaps.
Another prominent trader, “Magamyman,” made well north of half a million dollars on bets related to Iran and the Supreme Leader’s ouster. The backlash on social media was swift, with political leaders expressing outrage on X and users who were already skeptical of prediction markets pointing to the trades as another example of why the platforms just can’t be trusted.
Sen. Chris Murphy (D-Conn.) didn’t hold back, saying, “It’s insane this is legal. People around Trump are profiting off war and death. I’m introducing legislation ASAP to ban this.”
While Kalshi’s CEO responded to the backlash, the most controversial trades appeared to take place on Polymarket’s offshore platform, where users bet directly on whether the U.S. would strike Iran by specific dates.
Polymarket’s own site carries a disclaimer explaining that its U.S. platform is a CFTC-regulated designated contract market, while its international platform “is not regulated by the CFTC” and “operates independently.”
This distinction is important because it explains why Polymarket’s international site was able to host strike-date contracts, while Kalshi’s role in the controversy is narrower and more indirect. Kalshi didn’t list a straight “Will the U.S. strike Iran?” contract. Instead, it listed a “Ali Khamenei out as Supreme Leader?” contract, which some critics viewed as a practical proxy for a death market, even though Kalshi said it was structured to avoid that outcome.
Bubblemaps’ blockchain analysis uncovered six specific wallets that were funded in the 24 hours before the U.S.-Israeli strikes began. The patterns uncovered in the analysis point directly to a coordinated use of material nonpublic information.
The six suspicious wallets all wagered on the “YES” outcome for a U.S. strike by February 28. These accounts used a sophisticated tactic known as “decoy” trading, placing small bets on adjacent dates to make their primary, massive wagers appear to be nothing but speculative noise.
Two of those accounts, “Lettucehead718” and “suffix-295,” executed identical trades within seconds of each other on February 27. While Magamyman wasn’t the only one to turn a profit, the trader has become the face of the controversy, with verified profits of more than $500,000 across multiple Iran-related conflict markets during the recent strike window alone.
Magamyman’s successful bets include:
Also of note, Magamyman had previously won close to $87,000 betting “NO” on an “Israel strikes Iran by January 31, 2026” Polymarket contract. Unlike the six new wallets, the Magamyman account was opened in 2024.
Because U.S. law prohibits trading event contracts on death or assassination, Kalshi paused its “Khamenei Out” market immediately after his death was confirmed. CEO Tarek Mansour announced that all fees would be refunded and payouts would be capped at the last traded price before the death was reported, a decision that left many traders who had “won” the bet outraged and feeling the platform had scammed them.
One of the reasons the Operation Epic Fury trades are getting so much attention is that they’re part of a documented pattern of suspiciously well-timed bets on prediction markets that lead to big payouts for a select few who appear to be in the know.
In addition to these high-profile cases, just last week, Kalshi released information about two insider trading cases that had resulted in disciplinary action. One involved a video editor for MrBeast, Artem Kaptur, who had a “near-perfect” record in markets related to the YouTuber, including specific words and clip lengths.
In the other case, former California gubernatorial candidate Kyle Langford bet on himself winning the race. Langford was open about his activity, posting on X and encouraging others to bet on him.
Kalshi presented the cases as proof that their internal mechanisms to stop insider trading are working. However, if social media sentiment is any indication, the public isn’t convinced and continues to believe prediction markets are rigged in favor of those with access to inside information.
