Blockchain data platform Bubblemaps has identified a cluster of nine wallets on Polymarket that collectively earned roughly $2.4 million with a 98% win rate.
These wallets placed bets on contracts tied to US military operations, according to a Monday post on X by Bubblemaps. All major bets happened just before key events: the Feb. 28 attack on Iran, the killing of Iranian Supreme Leader Ayatollah Ali Khamenei, and the US-Iran ceasefire agreement.
Funding patterns and small losses
The accounts were funded through centralized crypto exchanges within a tight timeframe. Bubblemaps noted that the wallets also made some minor losing bets on Feb. 20. Those small losses likely served to “avoid attention” and disguise the larger moves. Four of those wallets each made around $400,000 in profit simply by betting the US would strike Iran on Feb. 28.
Nicolas Vaiman, Bubblemaps’ CEO, told Cointelegraph that while there’s no definitive proof of insider trading, the onchain trail looks “symptomatic of someone with an unfair informational advantage.”
Calls for tougher regulations
This investigation adds fuel to concerns about insider trading on decentralized prediction markets like Polymarket and Kalshi. Lawmakers are already moving to address the issue.
On March 10, US Democratic Senator Adam Schiff introduced the DEATH BETS Act. This bill would ban federally regulated prediction markets from listing contracts tied to war, terrorism, assassination, or individual deaths. The timing is not accidental: just weeks before, six Polymarket traders netted $1 million betting on the US strike against Iran.
Political contracts are a growing category
Elsewhere, California Governor Gavin Newsom signed an executive order in late March. It aims to stop public servants from insider trading on prediction markets related to political or economic events they can influence.
According to Dune Analytics data, political contracts now make up the third-largest category on Polymarket, at 12% of notional trading volume. On Kalshi, they account for 0.7% of weekly trading volume, ranking fifth. The numbers may still be small, but the trend is clear. Prediction markets are becoming a bigger arena for this kind of speculation, and perhaps that also means they’re becoming a bigger target for regulation.
