According to a Bloomberg report on July 21, as prediction markets such as Polymarket and Kalshi expand, the issue of betting using non-public information or informational advantage is receiving more scrutiny. Bloomberg Businessweek analyzed approximately 34,000 potential insider trades flagged by Polysights between August 2025 and June 2026; these trades were characterized by new accounts, low-probability entry, large bets, or high concentration of trading activity, but this alone could not determine whether the traders violated rules.
Data shows that from January 1 to June 30 this year, suspicious transactions flagged on Polymarket amounted to approximately $200 million, with geopolitical and war-related markets driving a significant increase in unusual trading volume. Profits from potential insider trading were highly concentrated, with the top 1% of profitable wallets capturing more than half of the gains, and 57% of the related wallets being created less than 24 hours before the transactions.
Some traders are reducing their chances of being detected by using multiple linked wallets and splitting orders. For example, 38 linked addresses placed bets in 90 geopolitical markets related to Iran and Venezuela, achieving a 98% win rate and a total profit of $1.6 million, all of which were withdrawn through the same Coinbase deposit address.
Polymarket stated that it monitors insider trading and other illegal activities, and has to date handed over nearly 100 wallets to law enforcement agencies. Kalshi has also strengthened its identity and employment information vetting and restricted the participation of political candidates, athletes, and other individuals who could influence the outcome in the market.