Congressional leaders are demanding federal investigations into the prediction betting platform Polymarket following suspicious trading activity that occurred just before President Donald Trump announced a U.S.-Iran ceasefire this week.
According to reports, more than 50 newly created accounts on Polymarket wagered significant amounts on a ceasefire agreement in the hours and minutes leading up to Trump’s Tuesday night social media announcement. These accounts had no previous betting history on the platform.
This marks the third major instance of questionable timing on Polymarket trades. Earlier this month, an unidentified user earned $400,000 by betting Venezuelan President Nicolas Maduro would lose power, placing the wager just hours before Maduro’s capture. Another trader made approximately $550,000 betting on U.S. military action against Iran and the removal of Ayatollah Ali Khamenei shortly before hostilities began.
Harvard University researchers published findings last month suggesting the problem extends far beyond geopolitical events. Using blockchain data analysis, they calculated that traders with possible insider knowledge have generated $143 million in profits on Polymarket, betting on everything from Taylor Swift’s personal life to Nobel Peace Prize winners.
Representative Ritchie Torres, a New York Democrat serving on the House Financial Services Committee, sent correspondence Thursday to the Commodity Futures Trading Commission requesting a thorough review of these suspicious trades.
“This pattern raises serious concerns that certain market participants may have had access to material nonpublic information regarding a market-moving geopolitical event,” Torres stated in his letter, which was exclusively shared with news outlets.
During a media interview, Torres questioned the odds of legitimate trading. “What is the statistical likelihood that of anyone other than an insider trader placing a winning bet 12 minutes before a market-moving presidential announcement,” Torres said. “There are two answers: God, or an insider trader. And something tells me that God it not placing bets around Donald Trump’s posts on Truth Social.”
Platforms like Polymarket and Kalshi enable users to place wagers on diverse events, from local weather forecasts in Phoenix to Federal Reserve interest rate decisions. While federal regulations prohibit U.S. residents from using Polymarket, the platform’s cryptocurrency foundation and minimal identity verification make enforcement challenging.
Connecticut Senator Richard Blumenthal also sent demands to Polymarket Thursday, seeking explanations for why the company continues permitting bets on warfare and violence, and questioning their efforts to prevent insider trading.
“Polymarket has become an illicit market to sell and exploit national security secrets unlike any in history, and by extension a potential honeypot for foreign intelligence services watching for those same suspicious bets and wagers,” Blumenthal wrote.
Bipartisan criticism has emerged from Republican lawmakers as well, with pending legislation in both chambers aimed at restricting these betting markets.
“We don’t want to imagine a world where America’s adversaries use prediction markets to anticipate our next move,” stated Representative Blake Moore, a Utah Republican, responding to the ceasefire betting revelations.
Polymarket has not responded to requests for comment regarding these allegations.
Both Polymarket and Kalshi face significant pressure as they pursue expanded U.S. operations, particularly in the profitable sports betting sector.
After being prohibited from U.S. operations in 2022, Polymarket is attempting reentry by purchasing a CFTC-licensed exchange and clearinghouse. The company has started limited domestic operations while maintaining its separate offshore cryptocurrency platform beyond U.S. regulatory reach.
Kalshi, already operating under U.S. regulation, aims to become America’s leading prediction market. The company has expanded heavily into sports betting, leading critics to characterize it as primarily a sports gambling platform with secondary event-based contracts. Both companies have formed partnerships with sports franchises and media organizations to expand their market presence.
The rivalry includes political connections, with Donald Trump Jr. holding investment stakes in Polymarket through his 1789 Capital venture fund while simultaneously serving as a paid strategic consultant for Kalshi.
