Prediction markets in the crosshairs: $200 million in suspicious trades on Polymarket — insiders, geopolitics, and a new era of trading
Prediction markets, emerging as a new class of insider trading, have been shaken by a massive wave of suspicious transactions. Over six months, the volume of such trades on Polymarket reached approximately $200 million — and this is just the tip of an iceberg that has already begun to alarm regulators and market participants.
The analysis, conducted using the Polysights service, is based on data from 34,000 transactions flagged as suspicious between August 2025 and June 2026. All of them took place on the global Polymarket platform, where bets are transparently recorded on the blockchain. However, transparency does not guarantee fairness: algorithms have identified anomalies that point to the possible use of non-public information.
How "Smart" Insiders Operate
The story of 21-year-old TikToker Kaden Booth is illustrative. Twelve hours before the Super Bowl, he flew to the stadium, timed the duration of the anthem rehearsals with a stopwatch, and placed over $50,000 on the bet that the performance would last 117 seconds. The anthem lasted 104 seconds — the bet paid off. Although Booth did not violate the platform's rules, his case demonstrated how blurred the line is between resourcefulness and a threat to market integrity.
Far more serious are the data on truly suspicious trades. Polysights evaluated each transaction based on eight criteria: bet size, account age, odds at the time of entry, and concentration of volume on individual events. This approach identifies atypical behavior but proves nothing — some participants may have simply been better prepared or taken a successful risk.
The main source of the surge in activity was geopolitical betting. The daily volume of suspicious trades peaked in late February amid events surrounding Iran. Winnings are distributed extremely unevenly: more than half of all money went to 1% of the most profitable wallets, with 57% of them created less than a day before the trades.
Insiders are becoming increasingly sophisticated. A group of 38 linked addresses bet on U.S. actions in Iran and Venezuela with 98% accuracy, earned $1.6 million, and withdrew the funds through a single Coinbase account. Another case involves military officer Gannon Ken Van Dyke, who, according to investigators, earned over $400,000 on Polymarket using secret data about the operation in Venezuela. A similar case was opened in Israel, where a reservist and a civilian were accused of betting based on classified military information.
Reaction from Platforms and Authorities
The Kalshi platform also did not stay in the shadows. It reported to the regulator about a White House teleprompter operator who allegedly profited from bets on Donald Trump's speeches. Earlier, Kalshi had already flagged congressional candidates who participated in bets on their own elections. U.S. authorities are also imposing restrictions: the White House sent a warning to employees in March, and the Senate unanimously banned such bets for its members and staff in April. Goldman Sachs management closed access to prediction markets for its employees — with exceptions only for sports and entertainment betting.
Polymarket tightened its rules in late March. The platform banned transactions using stolen information and illegal insider data, and handed over information on nearly 100 wallets to law enforcement. However, some economists see no harm in insiders. Economist Robin Hanson believes their trades make prices more accurate, and "keepers of secrets" should remember: traders always have an incentive to uncover them.
My comment as an analyst: Prediction markets are a unique experiment in democratizing access to information, but they also create ideal conditions for insider trading. While platforms rely on blockchain transparency, the real threat lies not in the technology but in the human factor. If regulators fail to find a balance between openness and control, we risk ending up not with a "market of the future" but with a giant arena for manipulation.