Sixteen bets accurately predicted the timing of U.S. airstrikes against Iran on February 27, earning $100,000. Later, a single user made over $550,000 by betting on Ayatollah Ali Khamenei’s removal from power just moments before his assassination by Israeli forces. On April 7, right before Donald Trump announced a temporary ceasefire with Iran, traders bet $950 million that oil prices would fall—and they did.
These well-timed wagers, which accurately predicted major developments in the U.S.-Israel conflict with Iran, generated huge profits and raised concerns among lawmakers and experts about potential insider trading.
Betting, once largely confined to sports, has expanded to include contracts on news events, where insider information could give some traders an unfair advantage. The rise of online betting platforms like Polymarket and Kalshi allows bets on virtually any news event. It has also become easier than ever to trade commodity derivatives like oil futures, where traders speculate on future oil prices.
Leaders of some U.S. federal agencies and members of Congress have expressed a desire to crack down on suspicious trading across different markets, but it remains unclear how much authority regulators will have.
“Is the problem that we don’t have legislation, or that we don’t have enforcement capabilities?” said Joshua Mitts, a law professor at Columbia University. “To have a law that can’t really be enforced effectively due to technological limitations is putting the cart before the horse.”
On the night of February 27, just before U.S. and Israeli strikes on Iran, an unusual influx of about 150 Polymarket accounts placed bets predicting the strikes for the following day. A New York Times analysis found these bets totaled $855,000, with 16 accounts earning over $100,000 each.
Soon after, a single anonymous Polymarket user, under the account name “Magamyman,” made over $553,000 by betting on Khamenei’s removal from power moments before his assassination in an Israeli airstrike. This was detailed in a complaint filed with the Commodity Futures Trading Commission (CFTC) by the consumer advocacy group Public Citizen. The complaint also cited a crypto-analytics firm that identified six “suspected insiders” who made a total of $1.2 million on Polymarket after Khamenei’s death.
A similar surge in well-timed bets occurred on April 7, when at least 50 Polymarket accounts placed wagers on a U.S.-Iran ceasefire hours before Trump announced it on Truth Social. Earlier, the president had warned that “a whole civilization will die tonight” if Iran did not open the Strait of Hormuz.
Traders were not only active on Polymarket; there were also similar spikes in oil futures trading just hours before Trump announced developments that would lower oil prices. On March 23, traders placed $580 million in bets on oil futures just 15 minutes before Trump posted on social media about “productive” talks with Iran, according to the Financial Times. Trump’s comments triggered a sell-off in oil markets, causing prices to plummet and resulting in a windfall for those traders.
The same pattern repeated on April 7, when traders spent $950 million on oil futures, betting on falling oil prices just hours before the ceasefire with Iran was announced.
“We can’t say from the outset whether any of these trades were illegal. Any one of them could be lucky, and any one of them could be based on lawful information,” said Andrew Verstein, a law professor at UCLA. “But many of them bear the hallmarks of suspicious trades that would naturally warrant investigation.”
For those closely following trading patterns, the rush of activity that ha…The scale and timing of these bets suggest they were more than just lucky gambles. “Not only the timing, but the amount of these bets makes it look very likely that someone had insider knowledge … and placed very, very substantial bets on it,” said Craig Holman, a government affairs lobbyist for Public Citizen, which filed a complaint with the CFTC.
Holman expressed doubt about how aggressively the CFTC will investigate, given its current structure under the Trump administration. The commission is designed to have five bipartisan members appointed by the president. Currently, it has only one commissioner: Michael Selig, appointed by Trump in late 2025, who has shown a friendly stance toward prediction markets.
Recently, the CFTC has been locked in disputes with state legislatures over who should regulate online betting platforms. Kalshi, a competitor to Polymarket, was temporarily banned in Nevada for operating without a gambling license, and faced criminal charges in Arizona for allowing election betting. Kalshi has denied wrongdoing, arguing that the CFTC has sole authority over online prediction markets.
“It’s a wild west phase for the prediction market industry, and now it’s spilled over into the stock market as well,” observers note.
Anonymous sources told Reuters and Bloomberg that the CFTC is investigating oil futures trades placed on March 27 and April 7, though the agency hasn’t publicly confirmed this. Speaking to Congress this week, Selig warned that the agency would pursue insider trading suspects, saying, “we will find you and you will face the full force of the law.” However, he added that no new regulations would be issued until the commission has its full five members.
Polymarket did not respond to requests for comment. White House spokesperson Davis Ingle stated, “federal employees are subject to government ethics guidelines that prohibit the use of nonpublic information for financial benefit.” He called any implication of official misconduct without evidence “baseless and irresponsible reporting,” and affirmed the CFTC’s commitment to monitoring fraud and illicit activity.
Federal law prohibits government employees from using non-public information for personal gain. In late March, a bipartisan group introduced a bill to ban Congress members and senior staff from betting on political events or policy decisions via prediction markets.
However, experts caution that insider trading laws are complex, and new online betting technology creates a complicated paper trail that is difficult to trace. Traditionally, insider trading involves using exclusive company information to trade stocks before that information becomes public, regulated by the SEC. Insider futures trading is a newer, less-defined area.
“The trick is that there are essentially no clean cases of people getting in trouble for commodity futures insider trading,” said Verstein. “The law there is just not well developed.”
In a recent paper, Columbia law professor Mitts and other researchers screened over 200,000 “suspicious wallet-market pairs” from February 2024 to February 2026. They found that traders in this group achieved a nearly 70% win rate, earning $143 million from well-timed bets on events ranging from the capture of former Venezuelan leader Nicolás Maduro to Taylor Swift’s engagement.The paper points out that traders with insider information face fewer legal hurdles when using platforms like Polymarket or Kalshi, as these markets exist in a legal gray area.
“The difficulty is that this trading happens via blockchain or other anonymous methods, making it very hard for regulators or prosecutors to identify the trader,” Mitts explained. “They would also need to prove the trader acted on wrongfully obtained information.”
However, the risks are significant. Insider trading involving classified military intelligence can undermine trust in both markets and governments.
“Unlike corporate insider trading, the government has many ways to ensure its predictions come true. It could simply start the war it foresaw, which is troubling because it distorts the real economy,” Verstein noted. “Real-world decisions, including financial ones, are being influenced by speculative bets.”
Frequently Asked Questions
Of course Here is a list of FAQs about the reports of traders placing large welltimed bets around the IranIsrael conflict framed in a natural tone
Beginner General Questions
1 What exactly happened
Reports from financial regulators and news outlets indicate that in the days and hours before Irans direct attack on Israel in April 2024 a small number of traders placed very large bets that stock markets would fall These bets made through complex financial instruments were extremely profitable when markets dropped after the attack
2 What does perfectly timed mean Why is it suspicious
Perfectly timed means the bets were placed just before the news of the impending attack became public The extreme precision and size of these trades just ahead of a major geopolitical event suggest the traders may have had nonpublic inside information about the conflict rather than just making a lucky guess
3 What kind of bets are we talking about
They werent simple stock picks They were likely short positions or purchases of put options on stock market indices These are financial contracts that increase in value when the market goes down They are sophisticated highrisk instruments typically used by professional traders and funds
4 Who is investigating this
Major financial watchdogs including the Securities and Exchange Commission in the US and regulators in Europe are investigating the trades They are tracing the transactions to see if they were placed based on material nonpublic information or if they breached other market rules
Advanced Detailed Questions
5 This is about a war not a company Is that still insider trading
Yes potentially Insider trading laws can apply to any material nonpublic information that could affect security prices not just corporate secrets If traders received confidential information about an imminent stateonstate attack from a government or military insider trading on that could be considered illegal insider trading
6 How could someone have gotten this information
Possible sources could include intelligence officials government personnel or individuals within defensemilitary circles who knew about the attack plans The investigation will focus on the communication trails between such sources and the trading firms or individuals involved
