Blockchain data platform Bubblemaps has identified a cluster of nine wallets on Polymarket that collectively earned $2.4 million, achieving a 98% win rate on contracts related to US military operations. The wallets placed their major bets just before significant military developments, including the Feb. 28 attack on Iran, the killing of Iranian Supreme Leader Ayatollah Ali Khamenei, and the US-Iran ceasefire agreement, according to a Monday post by Bubblemaps on X.
Bubblemaps noted that all accounts were funded through centralized cryptocurrency exchanges within a tight timeframe. They also placed some minor losing bets on Feb. 20, which likely served to “avoid attention.” Four of these wallets each made around $400,000 in profit by betting that the US would strike Iran on Feb. 28.
The investigation highlights growing insider trading concerns tied to decentralized prediction markets like Polymarket and Kalshi. While Bubblemaps does not have definitive proof that the accounts belonged to insiders, the onchain trail is “symptomatic of someone with an unfair informational advantage,” Nicolas Vaiman, CEO of Bubblemaps, told Cointelegraph.
Lawmakers Target War-Related Prediction Markets
US lawmakers have proposed new laws to address insider trading concerns on military-related prediction contracts. On March 10, Democratic Senator Adam Schiff introduced the DEATH BETS Act, which seeks to ban federally regulated prediction markets from offering contracts tied to war, terrorism, assassination, and individual deaths. The bill came shortly after six Polymarket traders netted $1 million by betting on the US strike against Iran.
Separately, in late March, California Governor Gavin Newsom signed an executive order to prevent public servants from insider trading on prediction markets that involve political or economic events they can influence. The CFTC also issued a no-action letter easing reporting rules for event contracts.
Market Impact
Politics-related contracts are currently the third-largest category on Polymarket, accounting for 12% of notional trading volume. On Kalshi, they represent about 0.7% of weekly trading volume, according to data from Dune. The findings from Bubblemaps add to ongoing debates over transparency and fairness in decentralized prediction markets.
