Recently, the escalating geopolitical conflict between the United States and Iran unexpectedly triggered a surge in trading activity on prediction market platforms. Blockchain data shows that some newly created accounts precisely bet before airstrikes and profit millions of dollars. This abnormal trading pattern has raised widespread concerns about insider trading and the use of confidential information by insiders.
Polymarket New Accounts Accurately Bet on “Airstrike Before End of February” and Profit Millions of Dollars
Before the U.S. military took action against Iran, the prediction market Polymarket saw trading volumes reaching up to $500 million. Analysis firm Bubblemaps SA pointed out that six new accounts accurately bet on “airstrike before the end of February,” earning about $1 million. The contract accumulated $90 million in trading volume. Some accounts even purchased contracts hours before the airstrike at a low price of $0.01. This highly precise and time-sensitive trading pattern is viewed by analysts as a potential sign of insider trading, raising concerns about market fairness.
Challenges of Macro Environment and Information Asymmetry
Prediction markets allow participants to place financial bets on geopolitical events, reflecting public expectations of macro risks. However, military information is only accessible to a few before public disclosure, creating severe “information asymmetry.” Coupled with the high anonymity of blockchain wallets, privileged insiders have strong incentives to position themselves early. Although the U.S. has hinted at military actions, the market makes reasonable guesses based on publicly available information. Still, clearly distinguishing legal predictions from illegal insider trading remains a significant challenge.
This incident highlights the regulatory gray area surrounding emerging prediction markets. As an offshore platform, Polymarket is not strictly regulated by agencies like the U.S. Commodity Futures Trading Commission (CFTC). In contrast, a regulated competitor, Kalshi, has clear rules; for example, Kalshi recently refused to offer markets based on the death of specific individuals to avoid moral hazards. Kalshi has launched investigations into 200 potential violations, uncovering dozens of cases. Notably, YouTuber MrBeast’s editor Artem Kaptur and former Republican California gubernatorial candidate Kyle Langford have been accused by the platform of insider trading.
(Prediction Market Kalshi Faces Frequent Issues! MrBeast Employee Suspected of Insider Trading, California Gubernatorial Candidate Bets on Their Own Race)
Impact on Financial Markets and Investors
Turning geopolitical events into tradable assets presents a new challenge for traditional investors. While these markets provide alternative indicators of market sentiment, they are also highly uncertain. Recently, Israel has filed charges against individuals suspected of using confidential intelligence to profit from prediction markets, indicating that governments are taking this issue seriously. The public should recognize that emerging assets are heavily driven by news and potential information gaps.
As conflicts continue to escalate, various new contracts have appeared on Polymarket, including questions like whether Iran will close the Strait of Hormuz and who will be Iran’s new Supreme Leader. However, so far, trading volumes for all these contracts remain minimal.
This article about Polymarket new accounts accurately betting on “airstrike before end of February” and profiting millions of dollars was first published by Chain News ABMedia.
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