$500 million market boom forecast "big gamble on Iran," someone makes $510,000 through insider trading, the U.S. will angrily call for legislation to ban it

As traditional financial markets around the world are closed for the weekend, over $529 million has flowed into prediction markets like Polymarket and Kalshi, betting on the course of the US and Israel’s airstrikes on Iran. Six new accounts made precise bets before the airstrikes, earning a total profit of $1.2 million, sparking insider trading accusations and strong condemnation from several US Congress members, who threaten to introduce legislation to ban such trading altogether.
(Background: Data shows prediction markets had a $10 million “spoiler” predicting Maduro’s fall ahead of time)
(Additional context: Trump claims the US successfully attacked three Iranian nuclear facilities, breaking a half-century red line, causing Bitcoin to plummet)

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• $529 million betting on Iran conflict, Khamenei contracts most popular
• 6 new accounts precisely positioned, on-chain tracking reveals insider doubts
• US lawmakers condemn “profiting from war,” CFTC issues warnings

With global traditional markets closed over the weekend, a large influx of capital shifted into prediction markets like Polymarket and Kalshi, as well as decentralized exchanges like Hyperliquid. Investors are using these 24/7 platforms to hedge risks or speculate on the impact of the US and Israel’s airstrikes on Iran.

$529 Million Betting on Iran Conflict, Khamenei Contracts Most Popular

As tensions before the airstrikes escalate, sharp traders began heavily betting on the Middle East conflict’s direction. According to Bloomberg, the total trading volume of Iran-related contracts on Polymarket has surpassed $529 million. Highly sought-after are geopolitical prediction contracts such as “Will Iran’s Supreme Leader Khamenei be ousted soon?” Both Kalshi and Polymarket are heavily promoting these types of contracts.

Meanwhile, decentralized exchange Hyperliquid has become a safe haven for capital. Its oil-linked perpetual contracts surged over 5% following the news of the airstrikes, with open interest reaching a record $1.1 billion. The native token HYPE also rose 13% to $30, outperforming other top 20 cryptocurrencies by market cap.

6 New Accounts Precisely Positioned, On-Chain Tracking Uncovers Insider Suspicion

However, this capital frenzy quickly turned into a controversy. On-chain analysis firm Bubblemaps tracked six new accounts that, just hours before the airstrikes, precisely bet that “the US will strike Iran on February 28,” earning up to $1.2 million. All these accounts were created in February of this year, with highly similar fund sources—one account bought over 560,000 shares of a “Yes” contract at about $0.108 per share, netting roughly $560,000 when settled at $1.

Last Saturday, widespread questioning erupted on social platform X, accusing some insiders of exploiting early knowledge of military strikes for profit. Similar allegations arose previously during US military actions against Venezuela and Maduro, when a new account bet $32,000 on Maduro’s fall and made over $400,000 in less than 24 hours. This prompted Congressman Ritchie Torres to propose the “Public Integrity in Financial Prediction Markets Act,” aiming to ban federal officials from trading on government-related prediction markets.

US Lawmakers Condemn “Profiting from War,” CFTC Issues Warnings

This suspected “war profiteering” has sparked strong outrage in US politics. Democratic Congressman Mike Levin exposed on social media that a Polymarket account named “Magamyman” made a single-day bet that the US would strike Iran, earning $515,000.

“It’s absurd that this is even legal. Trump’s associates are profiting from war and death. I will introduce legislation to ban such trading entirely.” — Connecticut Senator Chris Murphy

Arizona Senator Ruben Gallego also condemned sharply: “This is blatant insider trading and should be deemed illegal. These scoundrels are profiting from our fallen soldiers, which is both disgusting and heinous.” It is reported that since the start of the strike, three US soldiers have been killed and five wounded.

Notably, regulators have also taken action. Kalshi has temporarily suspended and penalized two users suspected of insider trading; the US Commodity Futures Trading Commission (CFTC) has issued warnings, stating that insider trading on prediction markets may already violate US law. Additionally, six Democratic senators have jointly written to the CFTC, urging enforcement against contracts that incentivize harm or death.