Suspicious Polymarket Bets Precede U.S.-Iran Ceasefire Announcement
Newly created accounts on Polymarket placed significant bets on a U.S.-Iran ceasefire shortly before its announcement, raising concerns about potential insider trading.
In the hours leading up to the April 7 announcement of a two-week ceasefire between the United States and Iran, a cluster of newly created accounts on the prediction market Polymarket placed substantial bets predicting this outcome. These accounts collectively earned hundreds of thousands of dollars in profits.
Despite President Donald Trump's earlier escalatory rhetoric, including a social media warning that "a whole civilization will die tonight" if Iran did not meet his demand to open the Strait of Hormuz by his 8 p.m. ET deadline, these bets were placed. An analysis of blockchain data revealed that at least 50 new wallets placed significant "Yes" bets on the ceasefire market before Trump's announcement at approximately 6:30 p.m. ET. One such wallet, created around 10 a.m. ET on April 7, placed approximately $72,000 in bets at an average price of 8.8 cents, resulting in a profit of $200,000. Another wallet, established 12 minutes before the announcement, made $31,908 in "Yes" bets at 33.7 cents, earning an estimated profit of $48,500.
The timing and nature of these bets have raised concerns about potential insider trading. Similar patterns have been observed in previous events on Polymarket, such as the January capture of Venezuelan President Nicolás Maduro, where newly created accounts placed large wagers shortly before the event and profited significantly. These incidents have prompted bipartisan groups of U.S. lawmakers to propose legislation aimed at broadening the definition of insider trading to include prediction markets. Todd Philips, a professor at Georgia State University, commented, "This is why these markets need regulation. We can't have people trading with inside information and expect other traders are going to be OK being in these markets."
Polymarket has labeled the April 7 Iran-U.S. ceasefire contract as "disputed" due to ongoing restrictions on ships passing through the Strait of Hormuz and continued missile attacks in the region. This dispute could take 48 hours to resolve, delaying payouts for some users. The platform has not responded to requests for comment regarding these recent betting activities.