New Polymarket Accounts Score Big on Iran Ceasefire Bets Before Announcement
A cluster of newly created accounts on the cryptocurrency-based prediction market Polymarket secured substantial profits by placing well-timed bets on a US-Iran ceasefire, just hours before former President Donald Trump publicly announced the agreement on Tuesday. These strategic wagers, which resulted in hundreds of thousands of dollars in earnings for the new customers, have ignited fresh scrutiny over potential insider trading within largely unregulated prediction platforms.
Strategic Bets Placed Amid Escalating Tensions
The lucrative bets were executed despite a highly volatile geopolitical climate. Earlier on Tuesday, Trump had issued a stark warning on social media, declaring that "a whole civilization will die tonight" if Iran failed to meet his demand to open the Strait of Hormuz by an 8pm ET deadline. Public rhetoric suggested an imminent confrontation, with few overt signals that a ceasefire deal was forthcoming.
An analysis of publicly available blockchain data, conducted via the crypto analytics platform Dune, reveals that at least 50 new accounts or wallets placed significant "yes" bets on the ceasefire contract throughout Tuesday, prior to Trump's Truth Social post announcing the agreement at approximately 6:30pm ET. Notably, these were the first-ever transactions for these specific wallets on the Polymarket platform.
Substantial Profits from Precise Market Timing
The scale of the profits is considerable. One wallet, created on Tuesday around 10am ET, invested roughly $72,000 in bets at an average price of 8.8 cents per share. On Polymarket, contract prices range from $0 to $1, representing a 0% to 100% probability of a specified event occurring. This user subsequently cashed out with an estimated profit of $200,000.
Another account, which joined the platform on April 6 and traded exclusively on this event, shows a winning total of $125,500. A separate wallet, created a mere 12 minutes before Trump's announcement, placed $31,908 in "yes" bets at 33.7 cents each, yielding an estimated profit of $48,500. The higher price point at that late hour may have reflected last-minute diplomatic efforts, including reported interventions by the Pakistani government to secure a two-week extension of Trump's deadline.
Some market observers speculate that these bettors may have anticipated Trump's retreat, banking on his established pattern during his second term of issuing bold threats only to later de-escalate—a tendency critics have mockingly labeled "Trump always chickens out" or TACO.
Contract Dispute and Platform Scrutiny
While some users reaped immediate rewards, others face delayed payouts. Polymarket has officially labeled the Iran-US ceasefire contract as "disputed," citing ongoing Iranian restrictions on shipping in the Strait of Hormuz and continued missile attacks in the region. Resolution of this dispute could take up to 48 hours.
Public blockchain data does not reveal the identities controlling these new wallets. Polymarket employs proxy smart contract wallets, allowing a single user to operate multiple accounts anonymously. Only the platform's internal data could determine whether these were genuinely new users or existing participants creating additional accounts. Polymarket did not respond to requests for comment regarding these trading patterns.
History of Suspicious Trading Patterns
This incident mirrors previous episodes on Polymarket where newly created accounts placed large, well-timed wagers. Similar clusters profited handsomely hours before the January capture of Venezuelan President Nicolás Maduro and have repeatedly capitalized on well-timed bets concerning military actions involving Iran.
These patterns have repeatedly raised alarms among the public and lawmakers, prompting questions about whether some traders are leveraging non-public, insider information to gain unfair advantages in prediction markets. In response, bipartisan groups in both the Senate and the House of Representatives have introduced legislation aimed at broadening the legal definition of insider trading to explicitly include activities on prediction markets.
Even leading platforms like Kalshi and Polymarket have acknowledged the necessity of expanding insider trading definitions within their own ecosystems to maintain market integrity and user trust.
Calls for Enhanced Regulation and Oversight
"This is precisely why these markets require regulation," stated Todd Phillips, a professor at Georgia State University who has extensively studied prediction markets and their regulatory frameworks. "We cannot allow individuals to trade based on inside information and simultaneously expect other participants to remain confident and engaged in these markets. Transparency and fairness are paramount."
The incident underscores the growing tensions between innovative financial technologies and the established need for regulatory oversight, particularly as prediction markets increasingly intersect with significant geopolitical events and potential information asymmetries.
