Polymarket is probing whether insider trading compromised markets centered on the Israeli election and how Prime Minister Benjamin Netanyahu would fare in the Oct. 27 contest.
Shortly before polls closed on Tuesday, prediction market data analytics firms Polysights and Bubblemaps flagged hundreds of newly created accounts making deposits on the blockchain ledger for the first time.
The accounts executed a series of well-timed trades on the Israeli election that quickly turned profitable, with some netting over $100,000 after exit polls indicated Netanyahu’s Likud party would win more seats than previously projected. In Israel, exit polls are released immediately after voting stations close.
Polymarket did not issue a public statement but confirmed that the platform is investigating the matter.
Quick Bets, Big Returns
Many of the Polymarket accounts in question were created less than an hour before voting closed at 10 p.m. local time in Jerusalem.
Several staked large wagers on Netanyahu and his bloc performing better than news reports earlier projected, with one trader risking $14,000 just 12 minutes before the polls closed. The trader cashed out the $14,000 stake for $42,000 hours later after the market adjusted to the exit polling.
What on Earth is going on in Israel? Odds of Benjamin Netanyahu winning the election have skyrocketed over 35 cents in the last two days,” Polysights wrote on X. “In the last 24 hours, our tools picked up massive inflows of YES buys on fresh wallets.”
Polysights said there is over $700,000 in potential payouts for Netanyahu to win the Israeli election from “fresh wallets with no trading history.” Polymarket’s international prediction market platform has seen more than $81.2 million in trades on the event asking, “Prime Minister of Israel after the next election?”
Both exit poll producers and election officials hold access to sensitive data that could be leveraged as insider information on prediction platforms like Polymarket. Party operatives monitoring polling stations and staff at internal polling firms could similarly obtain nonpublic intelligence.
Polymarket Controversies
In April, the U.S. Department of Justice filed charges against Army Special Forces Master Sgt. Gannon Ken Van Dyke, alleging that he used classified military secrets on Polymarket.
Van Dyke is accused of making $32,500 in trades related to when Venezuelan leader Nicolás Maduro would be removed from power. Van Dyke was allegedly involved in the mission to capture Maduro, and his well-timed Polymarket trades made him a profit of $409,000.
In May, federal prosecutors charged a Google security engineer with making over $1 million in fraudulent profits by using insider information to “predict” the outcome of Google-related search markets.
In September, federal authorities confirmed that the DOJ was investigating an accountant at KPMG for allegedly using nonpublic audit data to profit $22,000 on the earnings results of 18 publicly traded companies.