Cumulative abnormal trading of $45 million in Iran war-related prediction markets! Accounts registered for just 2 hours have made precise bets exceeding $1 million.

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While prediction markets are drawing billions of dollars in bets around the Iran war, a series of unusually well-timed wagers are arousing intense scrutiny from regulators and politicians.

A Bloomberg investigative analysis reveals that Polymarket's on-chain prediction contracts have recently seen unusually profitable trades around major policy announcements, with insider trading risks emerging as a systemic concern for new prediction platforms.

The latest example occurred days before news broke of a US-Iran peace deal. A Polymarket wallet account, created just two hours before its first trade, placed large bets on the "Yes" contract, earning around $1.5 million in contract payout after the news was announced, netting about $370,000 in profit. When this account opened one of its positions, the market estimated only a 6% chance of a US-Iran peace deal.

Bloomberg’s analysis shows that wagers related to the Iran war flagged as abnormal amounted to $45 million, making geopolitical events the largest source of suspicious trading on the platform.

Unusual Bets on the US-Iran Peace Deal

The involved wallet started building its position on June 2, when the odds in the market for "US and Iran reaching a permanent peace agreement before June 15, 2026" were just 14%. The wallet completed its last purchase on June 13, and then, within six hours after Pakistan's prime minister announced the peace deal at 5:22 pm on June 14, contract odds soared from 12% to above 80%. After three days of disputes, the contract was ultimately settled as "Yes", and the wallet netted about $370,000.

This bet might have simply been a sharp trade. However, the gap between the account's creation and its first trade was only two hours, closely matching typical patterns identified by analysts in information-driven trading.

Collective Bets on the Eve of US-Iran War

An even earlier batch of unusual trades was equally eye-catching.

Multiple wallets bought into the "Will the US military conduct airstrikes on Iran before February 28?" contract at very low odds within minutes, just hours before the US airstrikes were first reported.

Several of these wallets were only recently created — within hours or days before betting. The eight wallets together profited over $520,000 within hours.

Researchers note that, although it cannot be confirmed whether these trades were based on non-public information, these accounts display statistical characteristics highly correlated with informed trading:

Wallet ages are extremely short (0–1 days), entry odds are very low (about 12–36 cents), single bet sizes are far above average (about $40,000 versus the typical account’s $40), and net profits are significantly higher.

Prediction Markets Become a New Regulatory Frontier

These controversies are not new. Before the Iran conflict, precise bets just ahead of Trump’s tariff suspension announcement in April 2025 drew scrutiny; a US Army soldier was also charged for allegedly using classified information to bet on the ousting of Venezuela's former leader Maduro, and was accused of using confidential information.

The White House has already warned staff against using confidential information for betting, and the Senate has banned lawmakers and staff from trading in prediction markets.

The fundamental difference between prediction markets and regulated futures markets complicates oversight. Polymarket users trade via anonymous blockchain wallets, which cannot be directly linked to brokerage accounts, making it much harder to identify the real people behind suspicious trades.

Meanwhile, the geopolitical category on the platform has already attracted about $5 billion in bets this year, with over $1.5 billion in trades in April alone, marking a historic record.

Platform Strengthens Response, But Challenges Persist

Confronted with growing scrutiny, Polymarket says it updated its rules earlier this year to explicitly ban trading based on stolen confidential information or illegal inside information. The platform is also cooperating with multiple organizations to identify trading patterns consistent with informed trading, and is working with law enforcement in investigations.

The company spokesperson said its internal process has so far referred nearly 100 wallets to law enforcement, including those involved in the first and second convictions for insider trading in prediction markets in the US.

However, ways to evade detection remain, keeping regulatory headaches unresolved. Traders can spread positions across multiple newly created wallets, making it difficult for analysts to track complete portfolios, while large bets are more likely to trigger statistical alerts.

As the amount of money drawn to geopolitical wagers keeps rising and becomes more intertwined with policy decisions, distinguishing sharp market acumen from abuse of privileged information remains a major challenge for regulators.

Risk Disclosure and DisclaimerThe market carries risks, and investments require caution. This article does not constitute personal investment advice and does not take into account individual users’ unique investment objectives, financial circumstances, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific situations. Any investments based on this article are at your own risk. ```