Washington – Polymarket, the offshore prediction‑market platform, has sent the Justice Department a list of dozens of user accounts that appear to have profited from confidential military information. The referral, disclosed by a senior company official, predates a recent watchdog report but aligns with growing concerns about illegal war‑related betting.
Watchdog analysis uncovers $8 million in suspicious profits
The Anti‑Corruption Data Collective, a nonpartisan research group, examined publicly available Polymarket data and identified 152 wallets that earned roughly $8 million on markets tied to ongoing conflicts, including the war in Iran. The group noted several hallmarks of insider activity: brand‑new wallets placing well‑timed bets with long‑shot odds and achieving a 97 % win rate, far above the typical loss‑heavy profile of most prediction‑market traders.
Polymarket’s internal response
According to the anonymous senior official, Polymarket’s internal surveillance tools monitor about 150 signals for potential abuse. While the patterns flagged by the watchdog do not prove wrongdoing, they are considered strong indicators of possible insider trading. The company has recently bolstered its compliance program, hiring a former FBI official to develop proprietary monitoring software and partnering with firms such as Palantir and Chainalysis.
Regulatory scrutiny intensifies
Polymarket’s founder and CEO Shayne Coplan testified before the Commodity Futures Trading Commission (CFTC) in April, emphasizing the company’s commitment to market integrity. Coplan highlighted new “enhanced market integrity rules” introduced in March, which ban trades based on insider tips and prohibit individuals in positions of authority from betting on related outcomes.
Despite these measures, federal authorities remain vigilant. The Justice Department has not commented on the referrals, and the CFTC is reportedly investigating whether Polymarket’s operations comply with U.S. law. The House Oversight Committee and a bipartisan coalition of 44 state attorneys general have also called for tighter regulation, citing national‑security risks posed by war markets that could incentivize corruption or reveal classified information.
Recent related cases
In April, the Justice Department charged a Special Forces soldier with using classified military intelligence to bet on the U.S. raid that captured Venezuelan leader Nicolás Maduro. The soldier has pleaded not guilty. Earlier CNN reporting also noted a trader who allegedly earned nearly $1 million from suspicious bets on U.S. and Israeli strikes against Iran.
Other prediction‑market platforms, such as Kalshi, have faced insider‑trading concerns related to elections and cultural events, though those cases differ from the military‑focused allegations surrounding Polymarket.
Implications for national security
Researchers with the Anti‑Corruption Data Collective warned that allowing individuals to profit from classified military developments could undermine the nation’s security infrastructure. “Providing an opportunity for someone to break that seal of secrecy, just to make some money, puts our entire national security structure at risk,” said researcher Michelle Kendler‑Kretsch.
As federal regulators and lawmakers continue to examine prediction‑market platforms, the outcome of these investigations could shape future rules governing how, and whether, war‑related betting is permitted under U.S. law.
Original reporting: El Paso News (HLL/CB) — read the source article.
