Polymarket Faces Scrutiny as High-Stakes Geopolitical Bets Spark Insider Trading Fears

Polymarket is once again under intense scrutiny after a series of high-risk geopolitical prediction market bets reignited concerns that the platform may be used to launder inside information and influence public narratives. The controversy follows the widely discussed “Maduro trade,” which raised alarms among lawmakers, analysts, and market observers.

Earlier this month, an anonymous wallet reportedly turned a $30,000 wager into more than $400,000 by betting that Venezuelan President Nicolás Maduro would be removed from power. The bet was placed just hours before US forces captured him, prompting speculation of insider knowledge. US President Donald Trump later stated that a Venezuelan leaker tied to the operation was already in custody, further fueling suspicions around prediction markets and political intelligence leaks.

Blockchain analytics firm Lookonchain revealed that two of the three wallets linked to the Maduro profits have been inactive for nearly two weeks, suggesting possible intervention by law enforcement or centralized exchanges. However, the third wallet has resurfaced and placed a new bet predicting that Iran’s Supreme Leader Ayatollah Ali Khamenei would be out of power by January 31, as nationwide protests continue across Iran. That market remains active and closely watched.

Polymarket has also seen significant losses on Iran-related bets. One large trader recently placed a heavy “Yes” position on whether the United States would strike Iran by January 14. As protests escalated and Iran temporarily closed its airspace, Polymarket odds surged to 51%, attracting nearly $50 million in trading volume. When the strike did not occur and the market resolved “No,” the trader suffered a loss of around $40,000, wiping out more than 255,000 shares.

Despite the loss, concerns have only grown. Analysts warn that some traders may be using prediction markets for “information laundering,” a tactic where early bets are used to influence sentiment, trigger copy trading, and amplify narratives on platforms like X and Telegram. Because Polymarket odds are often cited as real-time indicators of geopolitical risk, large bets can shape public perception before facts are confirmed.

Lawmakers are paying attention. Following the Maduro incident, Representative Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act of 2026, which aims to ban US officials from trading on markets tied to government actions when they possess nonpublic information. While the bill has gained dozens of House co-sponsors, it has yet to advance.

Although no direct evidence links the Iran bets to US insiders, the pattern of sudden large wagers, viral odds movements, and rapid reversals has placed prediction markets like Polymarket under a more dangerous spotlight. The growing concern is no longer just about who is betting, but how those bets may be shaping what the world believes is about to happen.