Key Takeaways:

• Over $529 million was wagered on Polymarket over the timing of US strikes on Iran.
• Six new crypto accounts made about $1 million by betting shortly before the strikes.
• US lawmakers are pushing for tighter rules to stop insiders profiting from secret government information.

When US and Israeli forces launched coordinated airstrikes on Iran in the early hours of 28 February, 2026, a prediction market platform didn’t just see a surge in activity; it broke its own records. 

More than $529 million had been wagered on the timing of those strikes on Polymarket, a blockchain-based prediction market platform where users trade contracts on real-world events using cryptocurrency. 

A prediction market is a platform where people buy and sell “yes” or “no” shares tied to future outcomes, such as elections or geopolitical events. If the event happens, the winning side gets paid.

Now, Polymarket sits at the center of an intense debate over insider trading (using secret, non-public information to make money) and the ethics of financially profiting from armed conflict.

Six wallets, one suspicious pattern

The most alarming detail came from Bubblemaps, a blockchain analytics firm that studies public crypto transaction data on blockchain networks. 

The firm flagged six newly created crypto wallets that had placed bets specifically on a contract titled “US strikes Iran by 28 February, 2026?” hours before the first explosions were reported in Tehran. These six wallets collectively earned around $1 million in profit.

Most of these wallets were created and funded within 24 hours before the attack, and had no prior betting history. They bet specifically on the 28 February, 2026 date rather than broader timeframes also offered on the platform. The largest single wallet converted roughly $61,000 into more than $493,000 in profit. 

Bubblemaps noted that during conflicts, sensitive information can circulate privately before becoming public. Because Polymarket allows users to sign up with just a crypto wallet and does not require formal identity verification, individuals with early access to information may be able to trade anonymously.

Betting on a world leader’s death

The strike contract was not the only controversial market. 

A separate Polymarket contract, asking whether Iranian Supreme Leader Ayatollah Ali Khamenei would leave power by 31 March, 2026, drew $45 million in trading volume. The contract closed and paid out in full after Iranian state television confirmed his death on Saturday, 28 February, 2026. 

The top trader on that contract, identified only by the username “Curseaaaaaaa,” pocketed $757,000 on a successful “yes” bet, with four others each earning six-figure gains.

This is not Polymarket’s first insider trading controversy. In January 2026, a newly created wallet turned a $32,000 bet into over $400,000 by correctly wagering on Venezuelan President Nicolás Maduro’s removal before the news broke publicly.

Meanwhile, US-regulated prediction market platform Kalshi saw more than $50 million wagered on a similar Khamenei contract. After his death, Kalshi halted trading, clarified its rules, and reimbursed users’ net losses at a cost of $2.2 million to the company. The platform claimed that it does not offer betting contracts that resolve and pay out after someone’s death.

Lawmakers call for a crackdown

Political pressure had already been building before the Iran strikes.

A group of Democratic senators, led by California’s Adam Schiff, had already written to Commodity Futures Trading Commission (CFTC) Chairman Michael Selig, the federal agency overseeing derivatives markets in the US, demanding restrictions on war- and assassination-linked betting contracts before the Iran strikes occurred. 

On 28 February, 2026, Senator Chris Murphy of Connecticut announced plans to introduce legislation targeting prediction markets that allow government insiders to profit from classified information. 

Representative Ritchie Torres separately proposed the Public Integrity in Financial Prediction Markets Act of 2026, following the earlier suspicious Polymarket trade before the Nicolas Maduro operation. The bill plans to bar government officials from trading contracts tied to policy decisions using non-public information.

Polymarket responded by posting a public note on its platform, arguing that its markets gave people in conflict-affected areas real-time answers and information that conventional news sources could not provide as quickly.