Suspicious wagers on the US-Israel war in Iran are creating huge windfalls and raising concerns among lawmakers
Sixteen bets made $100,000 accurately predicting the timing of the US airstrikes against Iran on 27 February. Later, a single user would make over $550,000 after betting that Ayatollah Ali Khamenei would topple, just moments before his assassination by Israeli forces. On 7 April, right before Donald Trump announced a temporary ceasefire with Iran, traders bet $950m that oil prices would come down. They did.
These bets and other well-timed wagers accurately predicted the precise timing of major developments in the US-Israel war with Iran, creating huge windfalls and raising concerns among lawmakers and experts over potential insider trading.
Betting – once largely siloed to sporting events – has now spread to include contracts on news events where insider information could give some traders an advantage.
The proliferation of online betting markets like Polymarket and Kalshi has allowed bets on virtually any news event. It’s also easier than ever to buy commodity derivatives like oil futures, where traders gamble on what the price of oil will be in the future.
Leaders of some US federal agencies and some members of Congress said they want to crack down on suspicious trading taking place across different marketplaces, but it’s unclear how much leeway regulators will make.
“Is the problem that we don’t have legislation or that we don’t have enforcement capabilities?” said Joshua Mitts, a law professor at Columbia University. “To have a law that can’t really be enforced effectively given the technological limitations, it’s sort of putting the cart before the horse.”
On the night of 27 February, the day before the US and Israel would carry out strikes on Iran, an unusual influx of about 150 accounts on Polymarket placed bets that the US would strike Iran the next day. A New York Times analysis found the bets totaled $855,000, with 16 accounts pocketing more than $100,000 each.
Soon after, a single anonymous Polymarket user, under an account named “Magamyman”, made over $553,000 after betting that Khamenei would be “removed” from power just moments before he was killed by an Israeli airstrike, according to a complaint filed to the Commodity Futures Trading Commission (CFTC), the federal agency that regulates futures markets, by Public Citizen, a consumer advocacy group. The complaint also cites a crypto-analytics firm that identified six “suspected insiders” who made a total of $1.2m on Polymarket after Khamenei was killed.
The well-timed surge of wagers were seen again on 7 April, when at least 50 Polymarket accounts placed bets that the US and Iran would reach a ceasefire hours before Trump would announce it on a Truth Social post. Earlier, the president had said “a whole civilization will die tonight” if Iran did not open the strait of Hormuz.
Source: Drudge Report
