From January to June 2026, around $200.000 M in potential insider trading activity was identified on Polymarket, according to Bloomberg. The analytics service Polysights flagged approximately 34,000 transactions as suspicious due to unusual trader behavior patterns.
The most notable spike came from markets related to Iran and military events. Polysights looks at factors such as bet sizes, wallet age, volume concentration, and the timing of market entries, while emphasizing that these indicators only highlight anomalies and do not prove the illegal use of non-public information.
“Suspicious trading is a signal for further review, not automatic proof of a violation,” analysts said.
Politics, Wars, and Bets Under Scrutiny
Regulators are focusing on two main risks: the use of insider information and participation by people who may themselves influence the outcome of an event.
Polymarket updated its rules to ban trading based on stolen data and bets placed by participants who could influence market outcomes. The company also said it monitors illegal activity and has already submitted around 100 cases to law enforcement.
“Blockchain transparency makes it possible to identify suspicious transactions and analyze the movement of funds,” Polymarket said.
Some cases have already resulted in official investigations. In the United States, military service member Gannon Ken Van Dyke was accused of using classified information about a military operation in Venezuela to earn more than $400.000 M in profit on Polymarket. In Israel, authorities are investigating similar cases involving bets on military events connected to Iran.
Prediction Markets Create a New Type of Insider
Bloomberg also highlighted the structure of suspicious trades: more than half of the profits went to the top 1% of the most successful wallets, while 57% of those wallets were created less than 24 hours before the bets were placed.
One newly created account earned around $370.000 on a market related to a possible peace agreement between the United States and Iran. The wallet was created just two hours before the first bet was placed.
Polymarket believes that blockchain transparency helps uncover such cases, but the structure of prediction markets itself creates a new challenge: access to confidential information can give participants an advantage long before an event becomes public.