Polymarket Faces Investigation Over Suspicious Iran War Bets

Prediction markets have faced regulatory heat for years, but a new wave of scrutiny targeting Polymarket may be the most serious yet. An investigation into Polymarket’s war-related betting activity has uncovered a pattern of trades so statistically improbable that analysts say luck cannot explain it. What started as a data anomaly has since drawn in federal prosecutors, a military indictment, suspicious oil futures trades, and threats against a journalist.

A 98% Win Rate That Raised Immediate Red Flags

Analytics firm Bubblemaps identified nine linked accounts on Polymarket that placed over 80 bets connected to U.S. military actions and geopolitical developments involving Iran. Those accounts generated more than $2.4 million in profits. Their win rate: 98%.

The trades did not follow random market behaviour. They aligned with specific events, including U.S. strikes, developments involving Iran’s supreme leader, and a ceasefire announcement. Each time, the accounts were on the right side of the market before the news broke publicly.

Bubblemaps co-founder and CEO Nicolas Vaiman described the findings as unlike anything the firm had seen before on the platform. He stated plainly that luck alone could not account for the numbers. A former U.S. military officer working with Bubblemaps, operating under the alias “Deebs,” pointed to the sheer number of people involved in military operations as a factor. More participants means more potential for information to leak before it reaches the public.

Insider Trading in a New Form

The pattern caught the attention of Rob Schwartz, who spent 13 years at the Commodity Futures Trading Commission. Schwartz framed what Bubblemaps uncovered as a genuinely new regulatory problem, one that existing frameworks were not built to handle. The Polymarket investigation he referenced sits in a grey zone between financial crime and gambling enforcement, and that ambiguity has made decisive action difficult.

More than $1 billion has been wagered on military outcomes this year alone. Researchers from the Anti-Corruption Data Collective examined those markets separately and reported signs of what they described as systemic insider trading. Their analysis focused on large bets, above $2,500, placed on outcomes with winning odds below 35%.

The White House addressed the problem directly in March. Guidance issued to staff reminded them that using nonpublic information to place bets on prediction markets may constitute a criminal offence.

A Military Indictment Adds Concrete Weight

The investigation moved from theory to prosecution with the indictment of U.S. Army Master Sgt. Gannon Ken Van Dyke. Federal prosecutors allege Van Dyke used classified information to place bets on Polymarket related to an operation targeting former Venezuelan leader Nicolás Maduro. He reportedly wagered around $34,000 and earned more than $400,000. After withdrawing the profits, he allegedly attempted to close his Polymarket account. Van Dyke pleaded not guilty to the charges.

Polymarket stated it had identified the activity and referred it to law enforcement. The company said the indictment confirmed its cooperation with authorities and that insider trading would not be tolerated on the platform.

Oil Futures, Trump, and a Fifteen-Minute Window

The concerns extend beyond prediction markets. On March 23, traders placed more than $800 million on declining oil prices at approximately 6:50 a.m. ET. Fifteen minutes later, President Donald Trump posted on Truth Social that discussions with Iran had been productive. Oil prices fell more than 10%.

Attorney David Kovel estimated the traders behind those positions may have earned up to $80 million. When asked whether the trades pointed to insider trading, Kovel said it was a natural conclusion to draw, while noting that full certainty would require knowing exactly what information the traders held and when they received it.

Federal investigators are now reviewing those oil futures trades. The timing, the scale, and the outcome have made them difficult to set aside.

A Journalist Threatened Over a Market Position

Perhaps the most troubling detail to emerge from the broader Polymarket investigation involves journalist Emanuel Fabian. After Fabian published a report on an Iranian missile strike near Jerusalem, he received threatening messages from individuals whose Polymarket bets depended on the outcome his article described.

One message warned that his reporting would cost them $900,000 and that they would spend more than that to retaliate. The sender included personal details about Fabian’s family. Fabian reported the threats to police and to Polymarket. The company subsequently banned the accounts responsible.

The episode goes beyond financial crime. It points to a scenario where real-world journalism becomes a target because it influences market outcomes that people have large sums riding on.

What Comes Next

Oversight of prediction markets in the United States falls under the Commodity Futures Trading Commission. The agency has not yet announced formal action directly tied to the war-betting patterns, but the combination of a military indictment, an active federal review of oil trades, and mounting analytical evidence has placed the sector under serious pressure.

Polymarket has positioned itself as a willing partner to law enforcement. But the platform’s rapid growth into geopolitical and military markets has created risks that even a cooperative approach may struggle to contain. When bettors have financial incentives to access state secrets, intimidate reporters, or front-run presidential announcements, the question stops being about market integrity alone. It becomes a question of public safety.