Key Takeaways:
More than 150 wallets on Polymarket International may have traded on inside U.S. military information, drawing copycat wagers and raising concerns that the market could broadcast signals exploitable by foreign adversaries, according to research published Thursday.
"Most people vastly underestimate how observable unusual betting activity actually is on Polymarket. It's all right there on the internet, and we can see clear signs that big traders and bots are copying potential insider trades," David Szakonyi, co-founder of the Anti-Corruption Data Collective, said. "It would be naive to think foreign-intelligence agencies aren't monitoring these markets."
The nonprofit research group analyzed all settled markets through May 5, flagging 556 wallets it dubbed "Orcas" for placing long-shot bets of at least $2,500 within an hour on outcomes with odds of 35% or less. Of those, 152 wallets that bet on military and defense markets made $8 million collectively with an average win rate of 97.2%, ACDC said. The group said it uncovered dozens of previously unreported wallets beyond those already flagged by other researchers and the media.
The findings arrive as policymakers increase scrutiny of the prediction market industry after a U.S. soldier was charged in April with using classified information to bet $400,000 on the removal of Venezuela President Nicolas Maduro. Gannon Ken Van Dyke, who built his position more slowly and is therefore not among the 152 military Orcas identified, has pleaded not guilty. The Commodity Futures Trading Commission, which is pushing for jurisdiction over prediction markets, has brought charges in at least three cases so far.
Whales and bots trailed $300,000 in copycat wagers
Profiting from confidential government information is generally illegal, but ACDC said the greater concern is evidence that military Orca trades attract copycat bets from deep-pocketed "Whales" and automated trading bots. When an Orca bet on U.S. military action in Iran hours before the June 2025 strikes, a bot and a whale made copycat wagers of $200,000 and $100,000, respectively. Similar Orca bets before February U.S.-Israeli air strikes on Tehran appeared to trigger a flurry of first-time long-shot wagers by bots and whales on the same outcome.
Polymarket, founded in 2020, says it has strict controls, closely monitors for suspicious activity and has referred dozens of trader wallets to authorities, including the Maduro case. Spokespeople did not respond to requests for comment. The Department of Defense declined to comment on intelligence-related matters or the findings of third-party research.
ACDC, which comprises academics and investigators with expertise in illicit finance, argues that all traders should be required to prove their identity and that payouts on suspicious trades be withheld pending investigation. To truly mitigate insider-trading risks, it says markets where the use of non-public information is most actionable and profitable should be banned. "Limiting the type of people who can bet on prediction markets or relying on law enforcement investigations ... will not be enough," the group said.
The report sets up a fresh test for the CFTC's bid to police prediction markets, with any enforcement action likely to hinge on whether the agency can trace the anonymous wallets behind the military wagers. ACDC's call for identity verification and targeted market bans would, if adopted, reshape how platforms such as Polymarket operate and who can trade on them.
This article is for informational purposes only and does not constitute investment advice.
