Unusual transactions in Iran war prediction markets reach a total of $45 million! Accounts registered for just 2 hours placed over $1 million in accurate bets
While prediction markets are seeing billions of dollars in bets flood in around the Iran war, a series of exceptionally well-timed wagers is drawing intense scrutiny from regulators and politicians.
An investigative analysis by Bloomberg News reveals a pattern of highly profitable, anomalous trading on Polymarket’s on-chain prediction contracts occurring around the time of major policy announcements, making insider trading risk a systemic concern for emerging prediction platforms.
The latest example occurred just days before news broke of a US-Iran peace agreement. A Polymarket wallet created just two hours before its first transaction bought large amounts of "Yes" contracts, and after the agreement was made public, collected about $1.5 million in contract payouts with a net profit of roughly $370,000. When the wallet opened its position, the market estimated there was only a 6% chance the US and Iran would reach a peace deal.
Bloomberg’s analysis shows that for Iran war-related bets on Polymarket, anomalous trades flagged as suspicious have cumulatively reached $45 million, making geopolitical events the platform’s largest source of questionable trades.
Anomalous Bets on the US-Iran Peace Accord
The wallet in question started building its position on June 2, at which point the odds for the "US and Iran to reach a permanent peace agreement by June 15, 2026" market were just 14%. The wallet made its last purchase on June 13, and within six hours after Pakistan’s prime minister announced the peace agreement on June 14 at 5:22 PM, the contract odds jumped from 12% to over 80%. Following three days of deliberation, the market ultimately ruled the contract outcome as "Yes," netting the wallet about $370,000.
This bet may have simply been a shrewd trade. However, the account was created only two hours before its first transaction—a hallmark of the typical patterns identified by analysts in information-driven trading.
Collective Wagers on the Eve of US-Iran Conflict
Earlier clusters of anomalous trades were similarly striking.
Several wallets bought the "Will the US military conduct airstrikes on Iran before February 28" contract at extremely low odds within minutes—just hours before reports of the first US strikes emerged.
Many of these wallets were created only hours or days before placing their bets. In combination, these eight wallets made over $520,000 in a few hours.
Researchers noted that while it's impossible to conclusively determine whether these trades were based on non-public information, these accounts display statistical features highly correlated with informed trading:
Very short wallet lifetime (0 to 1 days); entry at very low odds (roughly $0.12-0.36); abnormally large single-bet amounts (about $40,000 versus an average account’s $40); and markedly high net profits.
Prediction Markets as the New Regulatory Frontier
Such controversies are not unique. Prior to the Iran conflict, well-timed trades immediately before the April 2025 announcement suspending Trump’s reciprocal tariffs had already drawn outside scrutiny; a US Army soldier was also prosecuted for allegedly using classified information to bet on former Venezuelan leader Maduro’s ouster, and accused of using insider data.
The White House has warned staff not to use classified information for betting, and the Senate has prohibited senators and staff from trading in prediction markets.
The fundamental difference between prediction markets and regulated futures markets makes oversight more challenging. Polymarket users trade via anonymous blockchain wallets that cannot be directly linked to brokerage accounts, complicating efforts to identify the real individuals behind suspicious trades.
Meanwhile, the platform’s geopolitical category has already attracted about $5 billion in wagers this year, with a record-breaking $1.5 billion in volume in April alone.
Platforms Strengthen Response, But Challenges Remain
Facing growing skepticism, Polymarket stated it updated its rules earlier this year to explicitly prohibit trading based on stolen confidential information or illegal insider knowledge, and is working with several institutions to identify trading patterns consistent with informed trading, cooperating with law enforcement in investigations.
A company spokesperson said its internal process has so far referred nearly 100 wallets to law enforcement—including those that led to the first and second convictions for prediction market insider trading in the US.
However, circumvention tactics continue to limit regulatory power. Traders can split positions among multiple newly created wallets, making it difficult for analysts to track cumulative exposures, while large bets are more likely to trigger statistical alerts.
As the volume of geopolitical wagers continues to climb and becomes increasingly intertwined with policy decisions, distinguishing between sharp market judgment and the misuse of privileged information remains a major challenge for regulators.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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