Polymarket Suspected of Widespread Insider Trading Issues
The non-profit organization Anti-Corruption Data Collective (ACDC) reported that the prediction market platform Polymarket exhibits abnormally high success rates for low-probability bets in government decision-related markets such as military and defense, suggesting a broader insider trading issue than the previous Green Beret incident.
From January 2021 to mid-March 2026, 435,000 settled markets had a cumulative trading volume of $54.4 billion, with an average success rate of 14% for political niche bets, and over 50% in some military-related cases.
Hours before the U.S. airstrike on Iran in June 2025, 19 low-probability YES contracts worth a total of $164,000 were concentrated in purchases, with 8 wallets profiting about $1.8 million, and a single wallet nearing $500,000.
Platform profits are highly concentrated, with 3% of traders dominating price discovery, and less than 1% of wallets capturing half of the profits.
Source: Public Information
ABAB AI Insight
ACDC had previously raised concerns regarding Polymarket's "Green Beret betting on Venezuela incident." This large-scale data analysis covers nearly 5 years of $54.4 billion in trading, continuing its tracking of information asymmetry issues in prediction markets. Earlier research by the London Business School and Yale University has confirmed that a small number of traders dominate price discovery.
In terms of capital flow, a few wallets accurately concentrated on low-probability contracts before sensitive military events, achieving high returns through concentrated purchases of YES shares, motivated by the advantage of potential government or military information. Resources shift from the platform's liquidity pool to a very small number of information holders, resulting in systemic profit concentration.
Similar cases of abnormal betting before multiple political and geopolitical events in 2024-2025, or controversies over prediction market manipulation during the FTX period, indicate that Polymarket is currently at an expansion stage intersecting high trading volume growth and regulatory scrutiny, particularly exposing the information asymmetry risks of event-driven contracts.
Essentially, this represents a transfer of pricing power: prediction markets shift the pricing power of event outcomes from publicly dominated information to those with potential insider information advantages through a few high-success-rate niche bets. The mechanism is that the anonymous trading design, lacking effective identity verification and post-event review, allows information asymmetry to directly translate into capital profits, undermining the overall fairness of price discovery on the platform.