TLDR
- Polymarket is investigating suspicious bets placed on Israel’s October 27 general election by newly created accounts.
- Bubblemaps found 101 accounts that received their first funding on election day before polls closed.
- One wallet turned a $14,000 bet placed 12 minutes before polls closed into about $42,000.
- Polymarket has reported the activity to law enforcement, but findings do not yet show whether traders had secret information.
- The platform also faced a security breach on October 29 with possible losses of up to $2.73 million.
Polymarket is investigating what it calls potentially suspicious trading tied to Israel’s general election, held on October 27. Hundreds of newly registered accounts placed winning bets on Prime Minister Benjamin Netanyahu’s Likud party shortly before voting ended.
The activity has renewed concerns about insider trading on prediction markets, where users bet on the outcome of real-world events.
The trading involved two contracts on the platform. One asked who would become Israel’s next prime minister. The other asked which party would win the most seats in parliament.
What Blockchain Data Shows
Blockchain analytics firms flagged unusual patterns before the polls had even closed. Polysights and Bubblemaps reported large deposits into new accounts, many with no prior trading history, according to The New York Times.
Bubblemaps identified 101 accounts that received their first funding on election day before polls closed. Several of those traders sold their positions at a profit after exit polls showed stronger results for Likud.
Some accounts reportedly made more than $100,000 in combined profits. One wallet placed a $14,000 bet just 12 minutes before polls closed.
After the odds shifted, that trader sold the position for about $42,000. That is roughly three times the original stake.
Polymarket said its investigative team is reviewing dozens of new wallets linked to the election markets. The findings so far do not show whether any traders had access to secret information.
Growing Scrutiny of Prediction Markets
The probe comes as platforms like Polymarket and Kalshi face more questions about insider trading and market manipulation. Both platforms have seen large trading volumes.
Earlier cases have raised similar concerns. In February, Israeli authorities charged two people with using classified military information to bet ahead of an Israeli military operation against Iran.
In the United States, some political candidates have also faced criticism for trying to trade on their own election campaigns.
Polymarket recently added more monitoring to election-related markets. The goal is to spot activity that could move odds or create false impressions about election results.
Lawmakers are also paying attention ahead of the US midterm elections. Senators Elizabeth Warren and John Curtis asked Polymarket and Kalshi what steps they are taking to stop manipulation.
In October, Polymarket partnered with Birches Health to support traders with compulsive behaviors. The program includes self-assessment tools, educational materials, and access to professional help, along with account limits and self-exclusion options.
The company also dealt with a security incident on October 29. Trading was briefly paused after hackers reportedly exploited compromised third-party JavaScript tied to monitoring provider DebugBear.
Blockchain analytics firms estimate that up to 737 accounts may have been affected, with losses possibly reaching $2.73 million. Polymarket acknowledged the incident and said it will reimburse affected users.
Polymarket’s review of the Israeli election wallets is ongoing. The company has reported the suspicious activity to law enforcement.
