Calls are mounting within Congress for investigations into the prediction market platform Polymarket, following a series of instances where anonymous traders placed strategic, well-timed bets on major geopolitical events just hours before they unfolded.
The Associated Press reported Wednesday that at least 50 new accounts on Polymarket made substantial wagers on a US-Iran ceasefire in the hours and even minutes before President Donald Trump announced the agreement late Tuesday on social media.
These were the sole bets placed through these accounts on the platform.
This pattern of uncanny foresight extends beyond the recent ceasefire. In January, an anonymous Polymarket user profited $400,000 by betting on Venezuelan leader Nicolas Maduro’s removal from office, hours before his capture.
Similarly, another account made approximately $550,000 in a series of trades effectively predicting a US strike on Iran and the removal of Ayatollah Ali Khamenei, just hours before the Iran war began.
Such prescient wagers have ignited accusations that prediction markets are ripe for insider trading.
A report from Harvard University researchers last month, utilizing public blockchain data, estimated that $143 million in profits have been made on Polymarket by individuals potentially possessing insider information on events ranging from Taylor Swift’s engagement to last year’s Nobel Peace Prize award.
Rep. Ritchie Torres, a New York Democrat who serves on the House Financial Services Committee and its subcommittee on digital assets and financial technology, sent a letter Thursday to the Commodity Futures Trading Commission (CFTC), demanding a review and investigation into these suspicious trades.
The CFTC regulates derivatives markets, which include prediction markets.
"This pattern raises serious concerns that certain market participants may have had access to material nonpublic information regarding a market-moving geopolitical event," Torres wrote in the letter, shared exclusively with The AP.
He further questioned, "What is the statistical likelihood that of anyone other than an insider trader placing a winning bet 12 minutes before a market-moving presidential announcement? There are two answers: God, or an insider trader. And something tells me that God it not placing bets around Donald Trump’s posts on Truth Social."
Prediction market platforms like Kalshi and Polymarket allow users to bet on a wide array of outcomes, from local weather to Federal Reserve interest rate decisions.
Currently, US residents have limited access to Polymarket, which was banned from the country in 2022. The company is attempting to re-enter the US market by acquiring a CFTC-licensed exchange and clearinghouse, providing a legal pathway for domestic offerings. A limited rollout has already begun in the US. Polymarket also operates a separate, crypto-based offshore platform, which remains outside US jurisdiction and accounts for most of its activity.
Sen. Richard Blumenthal, a Connecticut Democrat, also sent a letter to Polymarket on Thursday, demanding an explanation for why the company continues to allow trades on war and violence, and what efforts are being made to prevent insider trading.
"Polymarket has become an illicit market to sell and exploit national security secrets unlike any in history, and by extension a potential honeypot for foreign intelligence services watching for those same suspicious bets and wagers," Blumenthal wrote.
Republicans have also voiced criticism, calling for bans on such bets. At least two bipartisan bills are pending in Congress, one in the House and one in the Senate, addressing these concerns.
"We don’t want to imagine a world where America’s adversaries use prediction markets to anticipate our next move," stated Rep. Blake Moore, a Utah Republican, following the AP’s findings on the ceasefire wagers.
Polymarket did not immediately respond to a request for comment.
The stakes are high for both Kalshi and Polymarket as they seek nationwide approval to operate in the US, particularly in the lucrative sports betting market. Kalshi, already regulated in the US, aims to become the nation's dominant prediction market and has heavily invested in sports, leading some critics to label it primarily a sports betting platform with event-based contracts as a sideline. Both companies have also announced partnerships with sports teams and news organizations to expand their reach; The AP has an agreement to sell US elections data to Kalshi.
The competition also carries political undertones. Donald Trump Jr. is an investor in Polymarket through his venture capital firm, 1789 Capital, and also serves as a paid strategic adviser to Kalshi.
AP reporter describes intense Israeli attacks that stunned Beirut
Photos from Iran's roadside, from Tehran to the Turkish border
Melania Trump denies ‘false’ Jeffrey Epstein smears in public statement
Polymarket pulls bet on fate of US pilot missing in Iran amid uproar: ‘Dystopian death market’
Calls for investigation after well-timed trades anticipate Trump’s announcements
Polymarket opens pop-up bar for in person bets - but its first night was a bust
Kalshi and Polymarket rush to ban insider trading as senators move to curb prediction markets
Senators want to ban sports betting on prediction sites like Polymarket and Kalshi: report
