Polymarket exhibits abnormal betting again: four new wallets simultaneously place low-priced bets on Iran strike event

Polymarket is once again embroiled in a controversy over insider trading allegations. According to the latest reports, four newly created wallets simultaneously bet on the event “The U.S. will strike Iran before January 31, 2026” on Polymarket, when the event’s probability was below 18%. These four wallets had no prior betting history on the platform, and their synchronized betting behavior and low-cost entry have raised suspicions of informational advantage. This marks the second time Polymarket has faced similar controversy within the past week.

Anomalous Features of This Incident

Suspicious Betting Patterns

The betting behavior of the four wallets shows clear signs of coordination. Not only are their actions highly synchronized in timing, but they also all chose to intervene when the event probability was low. Such a betting strategy typically indicates that the participants possess information not yet priced into the market—even if this information is publicly available, the ability to react quickly and concentrate funds before others do demonstrates an informational and decisional advantage.

More notably, these wallets are all newly created accounts with no prior betting history on Polymarket. This “one-time strike” pattern is distinctly different from typical participants, who usually place multiple bets to familiarize themselves with the market.

Comparison with Recent Events

This incident is not isolated. According to the latest reports, Polymarket has experienced several similar suspected insider trading events recently:

These three incidents occurred within a few days, with notable similarities in the identities of bettors, behavioral patterns, and event types.

Deep Challenges Facing Prediction Markets

Systemic Information Asymmetry

As a decentralized prediction market, Polymarket’s core advantage is allowing anyone to bet based on their judgment of future events. However, this openness also constitutes its greatest weakness—making it nearly impossible for the platform to distinguish between rational judgments based on public information and those based on undisclosed or semi-disclosed insider information.

In fields like geopolitics and commercial secrets, information acquisition often involves natural asymmetries. Some participants, due to their professional background, geographic location, or connections, may access critical information earlier than the general market. In such cases, prediction markets can become a “paradise for insider traders.”

Regulatory and Compliance Gray Areas

Unlike traditional financial markets, prediction markets currently operate in a gray zone of global regulation. The U.S. CFTC and other regulatory bodies have yet to establish comprehensive frameworks for prediction markets. This means that even clear cases of insider trading lack effective enforcement mechanisms.

Polymarket itself is attempting to address these issues. According to recent reports, the platform has started charging trading fees on certain markets, claiming that these fees will be used to incentivize liquidity providers. However, these measures mainly target market structure issues rather than information asymmetry.

Confidence Crisis Among Market Participants

Each suspected insider trading incident further erodes the confidence of ordinary participants in the fairness of prediction markets. If most participants believe that some players possess insider information, they will become more cautious or even withdraw from the market. This confidence crisis directly impacts market liquidity and pricing efficiency.

Summary

The frequent occurrence of suspected insider trading events on Polymarket reflects fundamental challenges in the development of prediction markets. This is not just a problem for a single platform but a broader issue that the entire prediction market ecosystem needs to address. To truly realize the “predict the future” function of prediction markets rather than turning them into tools for information advantage profiteering, platforms must undertake deeper reforms in transparency, regulatory compliance, and market oversight. Currently, this problem remains far from resolved.