In the days before the US attacked Iran, a small group of people made unusually large bets on Polymarket, an online prediction market. Twelve new accounts placed bets nearly $67,000 that the attack would happen by Saturday morning. About half of these bets were made in the six hours before the airstrikes.
Some experts, including Matt Saincome, CEO of financial data provider Unusual Whales, say that when new accounts place very large bets on a single event, it raises questions about whether they had inside information.
How the suspicious bets were identified
The Financial Times tracked the accounts in two steps. First, they looked for bets much larger than normal for the odds offered. One Iran-related market had more than 20 times the usual number of unusual bets. Second, they looked for wallets that only bet on Iran-related markets, never sold early, and had a perfect record.
After this process, they found 13 suspicious accounts, 12 of which were created just days before the attack. Most of their bets were placed within 24 hours of the strike, this indicates that they were betting on the attack happening within a single day.
Why this raises concerns
Prediction markets like Polymarket allow people to trade anonymously using cryptocurrency. This can make it easier for insiders with advance knowledge of sensitive events to profit. Military operations, which often rely on surprise, are especially risky in this way.
Online communities watch prediction markets closely, trying to spot insiders and even copy their trades. Previous patterns have suggested possible insider trading for other events, including Israel’s military operations and the US capture of Nicolás Maduro in Venezuela.
Examples of profitable insider-like bets
In Israel, two reservists were recently charged with using classified information to profit on Polymarket, earning about $150,000. In Venezuela, seven accounts created in late December and early January bet on Maduro’s removal. They staked under $10,000 and collectively won over $130,000. One account added $32,000 in bets and earned $404,222.
Not all big bets are correct. In early February, a large bet on a US strike on Iran before Feb. 9 lost almost $100,000 when no attack occurred.
Big wins during the Iran strikes
By the time the US attacked Iran on February 28, Polymarket had seen $529 million in trading on contracts tied to the timing of the strikes. Six new accounts made about $1 million in profit by betting on the attack. These accounts had only ever placed bets on US strike dates. Some shares were bought hours before the first explosions in Tehran.
Blockchain analysts see patterns like these as signs of possible insider trading, though they cannot prove it on their own. A contract predicting the strike by Feb. 28 had $90 million in trading volume, making it the most popular contract on the platform.
Polymarket operates mostly offshore and is largely unregulated by US authorities. The Commodity Futures Trading Commission (CFTC) regulates US prediction markets but cannot fully oversee Polymarket. Some lawmakers, like Senator Chris Murphy, have called for laws to ban betting on military actions.
Betting on military events is growing fast. In one week, Polymarket users wagered $425 million on geopolitical events, up from $164 million the previous week. Iran-related contracts made up almost 18% of all bets, with markets tracking the US strikes dominating weekly volume.
Some contracts have even offered markets on sensitive outcomes, such as the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei. Kalshi, a US-regulated rival, avoids markets that settle on death, terrorism, or war. Polymarket continues to offer these contracts offshore. Democrats have called for tighter rules. They wrote to the CFTC demanding a response on war- and assassination-related contracts.