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A group of new accounts on the prediction market Polymarket made highly specific and well-timed bets on whether the US and Iran would reach a ceasefire on 7 April, resulting in hundreds of thousands of dollars in profits for these new users.
The bets were made hours before a two-week ceasefire was announced on Tuesday, even though US President Donald Trump’s rhetoric had escalated sharply and there were few signals that a ceasefire deal was imminent.
Earlier in the day, Trump had issued a warning on social media that “a whole civilization will die tonight” if Iran did not meet his demand to open the Strait of Hormuz by his 8 pm Eastern Time (2 am CET) deadline.
This is the latest in a series of episodes evolving prediction markets that have raised suspicions over potential insider trading from members of the Trump administration or other US government employees.
An analysis of publicly available blockchain data from Polymarket, using the crypto analytics platform Dune, shows that at least 50 accounts placed substantial “Yes” bets right before Trump announced the ceasefire in a Truth Social post at around 06:30 pm Eastern Time (00:30 am CET).
The wagers were the first bets ever made by these new wallets.
One of the accounts, created on the same day, placed roughly $72,000 (€61,600) in bets at an average price of $0.088. The buy-in for each betting event ranges from $0 to $1 each, reflecting a 0% to 100% chance of what users think could happen.
This Polymarket user then cashed out for a profit of $200,000 (€171,200). Another wallet, which joined the platform the day before, won over $125,500 (€107,400).
A third wallet, created just twelve minutes before Trump’s post, placed $31,908 (€27,315) of “Yes” bets at around $0.33 and is estimated to have earned a profit of $48,500 (€41,520).
The higher price for “Yes” at that time reflected the pricing in of reports about the efforts late on Tuesday by the government of Pakistan to get Trump to extend his deadline by two weeks.
It is also possible that these Polymarket users placed their bets expecting Trump to back down, given he has frequently made bold threats only to retreat, a phenomenon his critics have derided as “Trump Always Chickens Out” or TACO.
Bet settling and user identification
While some users reaped handsome profits, others must wait for payouts as Polymarket has labeled the 7 April Iran-US ceasefire contract as “disputed,” given that Iran was still placing restrictions on ships passing through the Strait of Hormuz and missile attacks in the region continued
Public blockchain data cannot identify who controls the new wallets. Polymarket uses proxy smart contract wallets, meaning a single user can create multiple accounts.
Only the company has the internal data needed to determine whether these were new users or existing users opening additional accounts.
Polymarket has not made any public statement on the issue.
Republican Congressman Blake Moore from the state of Utah, who has introduced legislation to regulate prediction markets, stated on Wednesday that “it is highly unlikely that these are good-faith trades, it is much more likely that these are insiders with access to information ahead of the public”.
“Without some kind of restrictions, there is nothing stopping government or military officials from profiting from their positions,” Moore added.
Such bets have repeatedly raised questions from the public as well as from members of Congress about whether some traders are using inside information to profit in these prediction markets.
Bipartisan groups of senators as well as representatives have introduced legislation that would broaden the definition of insider trading to include prediction markets.
Even the two biggest platforms in the industry, Kalshi and Polymarket, have previously admitted they see a need to broaden the definition of insider trading on their platforms.
