What Prediction Markets Are
Polymarket and Kalshi are platforms that let anyone bet on the outcomes of real-world events — sports, elections, wars, leadership changes, ceasefire dates. You buy shares in a yes or no outcome. If you’re right, you get paid. If you’re wrong, you lose your stake. The price of a contract reflects the collective probability the crowd assigns to an event happening.
During the Iran war, Polymarket hosted over 350 active markets on Iran-related outcomes: the date of US strikes, whether Khamenei would be removed, when a ceasefire would happen, whether US ground troops would enter Iran, and at one point — briefly — whether a nuclear weapon would be detonated. The market on whether the US would strike Iran accumulated $529 million in total bets, making it one of the largest single markets in Polymarket’s history.
The Documented Incidents
February 28, 2026 — Operation Epic Fury begins
Six wallets, $1.2 million, funded within 24 hours of the strike
Blockchain analytics firm Bubblemaps identified six cryptocurrency wallets that collectively made approximately $1.2 millionby betting that the US would strike Iran by February 28 — the exact day the strikes occurred. Most of the wallets were funded within 24 hours of the attack. They bet specifically on the February 28 contract rather than broader timeframes. They purchased “yes” shares hours before the military operation began. The largest single wallet turned roughly $61,000 into over $493,000 in profit. The CEO of Bubblemaps called it “pretty suspicious” and “strong signaling of insider activity.”
Status: Under investigation — no charges filed as of March 2026
Pattern from 2024 through February 2026
One anonymous trader: 93% win rate, nearly $1 million, always hours before US or Israeli military action
CNN obtained an analysis from Bubblemaps documenting that a single anonymous trader made nearly $1 million from dozens of well-timed Polymarket bets about Iran since 2024. The trader won 93% of their five-figure wagers about Iran, even though the events they predicted were unannounced military operations. The pattern included bets placed hours before Israeli strikes in October 2024, hours before US airstrikes on Iranian nuclear facilities in June 2025, and hours before the joint US-Israeli surprise attack in February 2026 that started the current war. Todd Phillips, a finance professor at Georgia State University and former CFTC advisory board member: “It sure seems like this person either has incredible luck, or was insider trading. Having win rates in the 80% to 90% range is just too good to be true.”
Status: Reported to CFTC — no action publicly confirmed
Around March 21, 2026
Eight new accounts, $70,000 bet, $820,000 potential profit on ceasefire
The Guardian and other outlets reported that eight new Polymarket accounts, all created around March 21, collectively bet nearly $70,000 on a US-Iran ceasefire being reached before March 31, positioning themselves to make nearly $820,000 if such a deal went through. The accounts were all newly created — a red flag analysts look for, since insider traders would not want their betting history visible. Trump signaled ceasefire talks were “going well” on March 26.
Status: Flagged by researchers — under scrutiny
Prior to 2026 war — June 2025
Israel indicts military reservist for using classified material to bet on Polymarket
Israeli authorities indicted two individuals, including a military reservist, for allegedly using classified material to bet on Polymarketduring Israel’s war against Iran in June 2025, according to local reports. This was the first confirmed criminal indictment related to insider trading on prediction markets during a military operation. The case established that the concern is not hypothetical.
Status: Criminal indictment filed in Israel
March 2026
Kalshi bets $150 million on Khamenei being “removed from power” — he was killed on day one
Kalshi hosted a market on whether Iran’s Supreme Leader Ali Khamenei would be “ousted.” $150 million was bet on this market.Khamenei was killed in the first wave of US-Israeli strikes on February 28. Kalshi ultimately issued refunds on the market, citing regulations barring wagers on death. The “Khamenei out as Supreme Leader” contract on Polymarket pulled $45 million in volume and resolved to 100% when his death was confirmed. The top trader, an account called “Curseaaaaaaa,” made $757,000 on a “yes” bet.
Status: Refunds issued — no investigation announced
“There is a blurry line between using official secrets to make lucrative trades and selling those secrets to the highest bidder. If that seems unthinkable, you just haven’t been paying attention.”
Paul Krugman, Nobel Prize-winning economist, Substack, March 2026
What Congress Is Trying to Do
Legislation introduced March 2026
Two separate bills have been introduced in Congress in response to the Iran war betting patterns. The BETS OFF Act would prohibit platforms like Polymarket and Kalshi from allowing bets on “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.” The End Prediction Market Corruption Act, introduced by Senators Merkley and Klobuchar, would bar the president, vice president, members of Congress, and their immediate families from trading event contracts on prediction platforms, and impose fines and profit clawbacks for violations. As of March 30, 2026, neither bill has passed.
Polymarket’s CEO Shayne Coplan told Axios in November 2025 that it was “super cool” that his platform “creates this financial incentive for people to go and divulge the information to the market,” including potential insiders. Following the pattern of Iran war trades, Polymarket updated its rules to ban trading on “stolen confidential information” — but the platform operates offshore and is out of reach of US regulations. Americans can access it with a VPN.
Sources: CNN March 24 2026 · Bubblemaps analysis · CoinDesk March 1 2026 · Bloomberg March 2 2026 · CNBC March 9 2026 · Al Jazeera March 25 2026 · The Guardian March 2026 · NPR March 26 2026 · Paul Krugman Substack March 2026 · The Week March 28 2026. Updated March 30 2026.