On February 13, Israeli authorities arrested two individuals suspected of using confidential information to conduct military-related trades on Polymarket, including a reservist and a civilian. A joint statement from the Israel Defense Forces, Shin Bet, and the police said the two are suspected of placing bets using classified information, and prosecutors have filed criminal charges for security crimes, bribery, and obstruction of justice.
It is understood that the reservist is employed by Shin Bet, and the arrest highlights the potential security risks associated with prediction markets. Earlier this year, several insider trading cases on Polymarket drew attention, such as a user who successfully bet hours before Venezuelan President Nicolás Maduro was captured by U.S. forces, earning approximately $400,000.
The Israel National News reported that an account named “ricosuave666” placed multiple bets in June 2025 on Israel’s military actions against Iran, earning over $152,300, including more than $128,700 from bets on “Israel taking military action against Iran before Friday.” It is unclear whether the arrested individuals are connected to this account.
The Israel Ministry of Defense emphasized that gambling based on classified information poses a serious threat to Israel’s military operations and national security, and the military and security agencies will continue to investigate such activities. Legislators worldwide have also expressed concerns that prediction markets could be misused, potentially undermining market integrity and public trust.
The lawyer for the arrested serviceman told Bloomberg that the indictment has flaws and that charges related to endangering national security have been dropped. Nonetheless, this incident serves as a warning about the potential security risks of crypto prediction markets related to sensitive information leaks and trading behaviors, which may lead to further regulatory and legal scrutiny.
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