Over 550 Polymarket Accounts Traded on Insider Knowledge, Research Shows

Hundreds of Polymarket accounts showed evidence of insider trading, a new report suggests.

The Anti-Corruption Data Collective (ACDC) identified over 150 wallets on Polymarket’s international site that may have used insider knowledge of U.S. military secrets to make profits.

Reuters and CNN reported that in addition, over 550 so-called “Orca” accounts were set up. These are short-life accounts that are set up to trade on high-value markets before disappearing.

Polymarket has so far not commented on the reports. However, it had reported the cases to the Justice Department under the requirements of its CFTC license.

150+ Suspicious Accounts ‘Traded on Military Secrets’

The big prediction markets, including Polymarket and Kalshi, have always operated an open approach to the types of trades available on its platform.

In addition to sports and entertainment, it has been possible to trade on the winners of presidential races and the price of Bitcoin.

In the ACDC report, mysterious trades scooped around $8 million for customers on some of Polymarket’s war markets.

The expansion of prediction markets could further fuel insider dealing.

How Insider Dealing Can Skew Markets

Prediction markets are binary (contracts are simple “Yes”/”No” options) so it’s easy for a market to resolve if an outcome has or hasn’t been reached.

For example, Kalshi offers a market on whether traffic in the Strait of Hormuz will return to normal by specific dates.

It’s possible to purchase shares (or “event contracts”) in the scenario happening or not happening. Contracts resolve at $0.00 or $1.00, depending on whether the trader is right or wrong.

Having inside knowledge, either at the White House, in the military, or at another U.S. department, can be a huge advantage. And while all share trades on prediction markets are visible, traders are anonymous.

Some want to crack down on prediction markets offering these sorts of trades. Similar rumblings have been felt in regards to bets on the recent wildfires, which could be manipulated by arsonists.

Insider Deals Hit Headlines

Unfortunately for an under-fire prediction markets industry, there have been multiple cases of alleged insider dealing this year.

Most notably, a U.S. solider won over $400,000 in January on the timing of Nicolas Maduro’s exit from office.

The Venezuelan president was ousted after a U.S. operation, but a trader had bought contracts on the prediction markets hours before Donald Trump announced the surprise raid.

Special forces, solider, Gannon Van Dyke pleaded not guilty to using insider knowledge of the raid to profit on Polymarket.

CFTC Vows to Crack Down on Insider Trading

The prediction markets’ regulator, the Commodity Futures Trading Commission, held an advisory committee meeting last week to discuss topics including platforms’ susceptibility to insider dealing.

The case of Gannon Van Dyke was brought up in an oftentimes heated meeting. CME Group CEO Terry Duffy was skeptical about prediction markets self-certifying, highlighting the risk of insider trading.

Self-certification would see Polymarket and others able to list contracts without getting CFTC approval first.

Multiple states have been pursuing Polymarket and others through the courts as the battle over regulatory powers continues.

The Supreme Court is likely to rule over who regulates prediction markets going forward. The future of markets open to manipulation is in the balance.