Report: Polymarket may have a wider insider trading problem, with a few wallets reaping the majority of profits.

According to a recent report by a non-profit research firm, the prediction market platform Polymarket may be involved in a wider range of insider trading issues than the previous "Green Beret bet on the Venezuelan attack." The study analyzed 435,000 markets settled between January 2021 and mid-March 2026, totaling $54.4 billion in trading volume. It found an unusually high success rate for low-probability bets in government decision-making markets related to military and defense. Specifically, the average success rate for these "niche bets" in political markets was approximately 14%, while some military-related contracts had success rates exceeding 50%. The study argues that these markets are difficult to predict using only publicly available information and are more susceptible to information asymmetry, including insider trading or the advantage of professional information. The report also points out that Polymarket's profits are highly concentrated, with approximately 3% of traders contributing the majority of price discovery on the platform, and less than 1% of wallets capturing about half of the profits. Taking the June 2025 US airstrike on Iran as an example, hours before the attack, 19 low-probability bets totaling $164,000 were concentrated on buying the eventually cashed-out "YES" contract. Eight wallets collectively profited approximately $1.8 million, with a single wallet profiting nearly $500,000. Although the Pentagon deliberately concealed the operation using decoy bombers and long-range stealth aircraft, a few traders still accurately predicted the outcome. The report recommends that Polymarket strengthen identity verification, implement conditional payouts for suspicious bets, limit markets where the outcome is determined by a few, and reduce overly granular contract designs. It also calls for a broader discussion on whether the public should bet on such events.