Polymarket under scrutiny as traders profit from Iran war predictions
Betting patterns suggest possible advance knowledge of military action.
Contracts related to Iran on the Polymarket betting platform have reached a total volume of $529 million. An analysis by analytics firm Bubblemaps found that several users appear to have generated unusually large profits, raising concerns about potential insider trading. The main findings were first reported by Bloomberg.
Polymarket operates as a hybrid between a stock exchange and a crypto trading platform, allowing users to place bets on real-world events. Each bet is binary, with a simple yes-or-no outcome. Questions range from geopolitics to sports and entertainment, for example, whether a ceasefire will be declared in Iran by a specific date, whether a particular film will win an Oscar, or whether a certain team will win a match.
Users purchase “shares” in either outcome, with the share price reflecting the implied probability of the event occurring. For example, a “yes” share on whether a ceasefire would be declared in Iran by March 2 was recently trading at 4 cents, implying a 4% probability, while a “no” share was priced at 96 cents. When the outcome is resolved, correct shares pay $1, while incorrect shares become worthless. This structure allows traders to profit from correctly predicting events. There is no formal limit on how many shares a user can buy.
Bets related to Iran are currently the most actively traded on the platform. The largest contract, on whether the Iranian regime will fall by June 30, has attracted about $3 million in trading volume and is currently evenly split, implying a 50% probability. Other bets include possible timelines for the return of exiled crown prince Reza Pahlavi, which is currently priced at a 13% probability by March 31.
Contracts on whether the United States would launch a ground invasion of Iran have reached $2 million in volume, with probabilities varying widely depending on timing. Bets on the timing of further U.S. strikes have also attracted significant activity, totaling roughly $1 million in volume across different possible dates.
Meanwhile, bets on a potential ceasefire have drawn $861,000 in trading volume, with implied probabilities rising over longer time horizons, from 24% for early March to 77% by late April.
According to Bubblemaps, at least six accounts earned approximately $1 million by correctly betting that the United States would attack Iran by February 28. The accounts displayed several unusual characteristics.
All were newly created in February, and in most cases their only activity was betting on the timing of the attack. Some of the bets were placed just hours before the strikes began.
One account placed an initial losing bet on an earlier date but subsequently wagered $26,513 on February 28 and earned a profit exceeding $174,000. The February 28 contract itself attracted about $90 million in total trading volume, making it the most actively traded contract related to the attack.
“Prediction markets are among the first products to reflect geopolitical developments,” Bubblemaps said in its analysis. “In times of war or conflict, information can circulate among certain participants before it becomes public. Combined with Polymarket’s reliance on crypto wallets, which offer a high degree of anonymity, this may create incentives for early trading based on privileged information.”
Polymarket has faced growing criticism for allowing bets on the timing of military strikes and other sensitive geopolitical developments.
In response, the company defended its platform.
“The promise of prediction markets is to harness the wisdom of crowds to generate accurate and unbiased forecasts about important global events,” the company said in a statement. “This capability can be particularly valuable during periods of uncertainty, when traditional information channels may not provide clear answers.”
However, analysts are increasingly questioning whether Polymarket’s predictions truly reflect collective judgment, or whether some participants may be acting on advance knowledge.
This is not the first time unusual trading activity has been detected in markets related to Iran. About a month ago, analytics firm Polysights identified a cluster of accounts heavily betting that Iran’s Supreme Leader, Ali Khamenei, would no longer hold his position by the end of March. Nearly 90% of accounts flagged as suspicious had taken positions supporting that outcome.
The bet itself also drew criticism because it did not distinguish between different scenarios, including death, resignation, or removal, leading some critics to argue that it created troubling financial incentives.
These incidents follow earlier cases involving alleged use of insider information in prediction markets. In one prominent case in Israel, authorities charged a reservist and a civilian with using classified military information to place bets on operational developments in 2025, generating profits of approximately $150,000.
Investigators have also identified suspicious trading activity in contracts related to the fall of Venezuelan President Nicolás Maduro, which followed a U.S. military operation earlier this year.
