Iran strike bets spark insider trading questions

What the data shows

A total of $529 million was laid on Polymarket contracts tied to the timing of the strikes, with $150 million across two now-disputed contracts on the removal of Khamenei as supreme leader. 

Blockchain analytics firm Bubblemaps identified six accounts that made $1.2 million combined, including one that joined the platform in February, had never bet on any other topic, and entered its position just hours before the strike. There is no public evidence that the traders had prior knowledge of the strike.

Separately, analytics platform Polysights noted a wave of buying from new wallets in mid-January on Iran-related contracts, concentrated in bets on “Khamenei out” by the end of March.

One account trading under the username “Magamyman” made over $553,000 betting on the timing of Khamenei's ouster. The White House denied anyone in Trump's orbit was behind the trades, though Donald Trump Jr. is an adviser to Polymarket and his venture capital firm 1789 Capital has invested in the platform. The Trump administration has also dropped two federal investigations into Polymarket opened under Biden.

How the platforms responded

Polymarket did not respond to requests for comment. Its “Khamenei out” contracts entered a dispute period after token holders challenged the resolution.

Kalshi issued partial refunds to traders at the last price before Khamenei's death was confirmed, citing U.S. laws prohibiting markets where people can profit from death and assassinations. The decision drew immediate backlash from traders who had bet correctly. “Getting rugged on a 100% correct prediction because of a fine-print ‘death carveout' is wild,” wrote one user on Kalshi's Discord.

Legislative pressure

Sen. Chris Murphy said on X: “It's insane this is legal. People around Trump are profiting off war and death. I'm introducing legislation ASAP to ban this.” Rep. Mike Levin called for transparency and oversight, saying prediction markets cannot serve as a vehicle for profiting from advance knowledge of military action.

A new trade group led by Trump's former acting Chief of Staff Mick Mulvaney – Gambling Is Not Investing – also launched this week to push for tighter guardrails on prediction markets, arguing that rebranding sports wagering as investing misleads consumers and undermines existing regulatory protections.

Polymarket is regulated by the CFTC, not the SEC, which has complicated efforts to apply existing insider trading law to the platform.