Nine connected accounts on Polymarket have reportedly made over $2.4 million by betting largely on U.S. military actions. According to Bubblemaps, a data analytics firm, these accounts raised eyebrows for their suspiciously high win rate of 98% across more than 80 bets. This raises questions about potential insider trading, especially since bets were placed during key events in the Iran conflict, like U.S. strikes and a ceasefire announcement.
Nicolas Vaiman, co-founder of Bubblemaps, pointed out that “luck alone cannot explain those numbers.” Betting on future events, including military actions, is gaining popularity, with over $1 billion wagered this year alone. However, the recent indictment of a U.S. Army soldier accused of using classified information to win bets has sparked concerns about insider practices.
Rob Schwartz, a law firm partner formerly with the Commodity Futures Trading Commission, described this as a new kind of insider trading.
Polymarket, the largest prediction market, boasts that their trades are fully transparent, yet the identity of their traders remains hidden. The platform stated they take action against suspicious activities and refer cases to law enforcement.
Military-related bets face scrutiny, especially since U.S. laws prohibit wagers on military actions, leading some users to employ VPNs for access. For example, allegations against Army Master Sgt. Gannon Ken Van Dyke suggest he made substantial bets just before a covert operation, earning over $400,000. He has pleaded not guilty to the charges.
Deebs, a former military officer now at Bubblemaps, emphasized that many individuals involved in military operations can become sources of insider information, increasing the risk of corruption in betting practices.
Recent investigations by the Anti-Corruption Data Collective indicate there may be systemic insider trading in military betting on Polymarket. Their report highlighted a trend where bettors placed substantial wagers on low-odds outcomes, frequently winning more than they lost.
David Kovel, a former commodities trader, expressed concerns about related trades in heavily regulated commodity markets. For example, on March 23, 2023, amidst escalating conflict in Iran, over $800 million was suddenly bet on falling oil prices just before the U.S. president suggested a truce. This prompted questions about possible insider trading, especially as markets reacted quickly to that news.
The situation has escalated dangerously, with reports of threats made against journalists covering military conflicts. Emanuel Fabian, a correspondent for the Times of Israel, received disturbing messages after reporting on an Iranian missile strike scenario, indicating the high stakes involved in war-related betting.
While Polymarket has stated that they monitor for insider trading, the effectiveness of their measures is under scrutiny. The Commodity Futures Trading Commission oversees these markets, but their resources and enforcement have dwindled in recent years. Federal investigations are ongoing, aiming to determine if insider trading occurred in these high-stakes military-related bets.
Experts warn that the increasing visibility of insider trading on prediction markets could endanger national security. As Deebs stated, adversaries may exploit this information to strategize their actions.
In summary, as technology advances and industries evolve, the intersection of betting, military operations, and insider information remains a growing concern that requires careful oversight and regulation.
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Iran, Polymarket, prediction markets
