A new wave of allegations is putting prediction markets under renewed scrutiny, after blockchain investigators uncovered a seemingly highly coordinated series of profitable bets tied to US military activity in Iran. Findings from analytics company Bubblemaps reveal an interconnected group of nine Polymarket accounts that collectively earned $2.4 million by accurately predicting sensitive geopolitical events.
The Accounts Attempted to Mimic Normal Behavior
According to a recent CBS report, the suspicious trades happened around US military action in late February, raising concerns that private information may be leaking to prediction platforms. Bubblemaps claims that the offending accounts were created just days before the first wave of American strikes. These wallets had a nearly perfect track record on Iran-related events. They correctly guessed the timing of strikes, leadership changes, and a short-lived ceasefire arrangement.
In addition to their uncanny accuracy, the accounts in question also followed a pattern. They all have small losing bets, usually up to several hundred dollars, randomly spread across their trading history. Investigators suspect that these losses constituted a deliberate effort to mimic normal trading behavior and avoid detection. Meanwhile, the larger positions were almost always on point.
We spotted nine Polymarket accounts, all connected, who made, collectively,$2.4 million betting almost exclusively on US military operations.
Nicolas Vaiman, Bubblemaps CEO
Nicolas Vaiman, CEO of Bubblemaps, noted that it was almost impossible to identify the nationality of these accounts without direct confirmation from Polymarket. The only clue was the name of one of the accounts, “whopperlover.” However, the group’s trading activities have been consistent, focusing almost entirely on speculation surrounding the US involvement in Iran.
The Regulatory Response Remains Slow and Largely Ineffective
Bubblemaps’ investigation revealed that millions of dollars in profits were transferred to centralized exchanges such as Bybit, Binance, and HTX, often using intermediary services to obscure the paper trail. These tactics have made it challenging to determine whether the accounts belong to the same individual or a coordinated group.
This report follows a recent incident where a US soldier based in Fort Bragg was arrested after prosecutors charged him with abusing insider information to profit from military action in Venezuela. Platforms like Polymarket argue they only provide a platform for price discovery, where users act on their own beliefs and available information. However, the two incidents raise questions about whether prediction markets are becoming the preferred venue for insider trading.
The rising controversy has led some lawmakers to propose more stringent regulations of prediction markets, while others maintain that existing financial rules already cover such misconduct. The Commodity Futures Trading Commission has vowed to crack down on any trading abusing improperly obtained data. However, the regulator acknowledged that not all informed trading is illegal, leaving a potential loophole.
