Lawmakers Call for Investigation into Polymarket Over Suspicious Bets on U.S.-Iran Ceasefire

Congressional leaders are urging federal regulators to investigate Polymarket, a prediction market platform, following reports of well-timed bets on a U.S.-Iran ceasefire. In the hours leading up to President Donald Trump's announcement of the ceasefire on April 7, at least 50 newly created accounts placed substantial 'Yes' bets on the event, resulting in significant profits.

This pattern of strategic, well-timed wagers has raised concerns about potential insider trading. Similar incidents have occurred previously, including a $400,000 profit from betting on the capture of Venezuelan leader Nicolás Maduro and a $550,000 gain from predicting a U.S. strike on Iran.

Rep. Ritchie Torres (D-N.Y.) has called on the Commodity Futures Trading Commission (CFTC) to investigate these trades, expressing concerns that certain market participants may have had access to material nonpublic information regarding market-moving geopolitical events. Similarly, Sen. Richard Blumenthal (D-Conn.) has demanded that Polymarket explain its measures to prevent insider trading and its policies on allowing bets related to war and violence.

In response to the scrutiny, Polymarket has updated its rules to prohibit trading on stolen confidential information, illegal tips, and events where traders can influence the outcome. The platform has also introduced enhanced surveillance and enforcement measures to detect and prevent insider trading.

The CFTC has emphasized that insider trading laws apply to prediction markets and has indicated plans to actively prosecute violations. David Miller, the agency's new director of enforcement, stated that curbing insider trading on prediction markets is a top priority.

As Polymarket seeks to reenter the U.S. market after a 2022 ban, it faces mounting bipartisan calls for regulation or prohibition of such platforms, with critics warning that adversarial states could manipulate or monitor these markets.