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Congress is pushing for a closer look at Polymarket after a run of well-timed geopolitical bets, with recent Iran war trading now at the center of the fight. Lawmakers from both parties are raising insider trading concerns as the platform tries to rebuild a path into the US market.
Good to Know
Polymarket is facing fresh pressure in Washington after a cluster of accounts placed large bets on a US Iran ceasefire shortly before President Donald Trump announced one on social media. According to AP reporting, at least 50 newly created accounts placed those wagers and made no other trades on the platform.
That trading pattern triggered a letter from Rep. Ritchie Torres to the Commodity Futures Trading Commission, which oversees derivatives markets that include prediction platforms. “This pattern raises serious concerns that certain market participants may have had access to material nonpublic information regarding a market-moving geopolitical event,” Torres wrote.
Torres was even blunter in remarks to The Associated Press. “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 in an interview with AP. “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. “
Blumenthal added more pressure with a separate letter to Polymarket focused on contracts tied to war and violence, as well as safeguards against 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.
Lawmakers are not only focused on one event. AP also pointed to earlier cases, including about $400,000 in profit from a bet tied to Nicolas Maduro and about $550,000 linked to wagers on a US strike on Iran and the removal of Ali Khamenei. A Harvard study released last month estimated that $143 million in Polymarket profits may be tied to traders with nonpublic information.
Republicans have also objected to event contracts around geopolitical outcomes. Rep. Blake Moore said, “We don’t want to imagine a world where America’s adversaries use prediction markets to anticipate our next move.” At least two bipartisan bills, one in the House and one in the Senate, are already under consideration.