Blockchain data platform Bubblemaps identified 9 connected Polymarket wallets that collectively earned $2.4 million with a 98% win rate on contracts tied to US military operations, intensifying scrutiny of prediction markets' vulnerability to insider information. The wallets placed major bets shortly before the February 28 attack on Iran, the killing of Iranian Supreme Leader Ayatollah Ali Khamenei, and the US-Iran ceasefire agreement, according to Bubblemaps. The pattern has raised concerns that decentralized prediction markets can be exploited by traders with access to sensitive or non-public information. Bubblemaps said the accounts were funded through centralized cryptocurrency exchanges within a tight timeframe, with four of the wallets each generating approximately $400,000 in profit by betting that the US would strike Iran on February 28. While the findings do not prove the wallets belonged to insiders, they underscore the debate over whether military, war and assassination-related contracts create a market for sensitive information, especially when wallets can be created quickly and funded through crypto channels.
## What Does the On-Chain Trail Show?
The Bubblemaps analysis centered on timing, wallet connections, and trading results. A 98% win rate across contracts tied to military operations is unusual in markets where outcomes can depend on classified decisions, fast-moving diplomacy, and sudden security events.
Nicolas Vaiman, CEO of Bubblemaps, told Cointelegraph that while the firm cannot definitively say the accounts belonged to insiders, the on-chain trail is "symptomatic of someone with an unfair informational advantage." He added: "We cannot say with certainty that this was an attempt to hide, but it is suspicious that funds were routed through CEXs and third-party services before funding new Polymarket accounts, effectively covering their tracks."
Centralized exchanges and third-party services can make attribution harder unless investigators obtain account-level records from those platforms. On-chain data can show wallet behavior, funding routes, and trading outcomes, but it usually cannot identify the person behind a wallet without assistance from exchanges, payment processors, or law enforcement.
### Investor Takeaway
The issue extends beyond whether these 9 wallets had insider access. The broader risk is that prediction markets tied to military events may attract traders who believe private information can be converted into near-instant profit.
## Why Are Lawmakers Targeting War-Linked Contracts?
The findings come as US lawmakers push for tighter limits on prediction market contracts tied to war, terrorism, assassination, and death. On March 10, Senator Adam Schiff introduced the DEATH BETS Act, which seeks to ban federally regulated prediction markets from listing contracts tied to those categories.
The bill followed earlier concerns after 6 Polymarket traders reportedly netted $1 million by betting on the US strike against Iran. Lawmakers argue that such contracts create financial incentives around events involving military action, public officials, and individual deaths.
California Governor Gavin Newsom signed an executive order in late March aimed at curbing public servants from insider trading on prediction markets tied to political or economic events they may be able to influence.
The regulatory concern extends beyond Polymarket. Kalshi, which operates in the federally regulated prediction market space, has also drawn attention as lawmakers and regulators assess whether event contracts can coexist with rules designed to prevent manipulation, misuse of confidential information, and trading on government-linked knowledge.
## What Are the Market Implications for Polymarket and Kalshi?
Prediction markets have expanded because they turn political, economic, and geopolitical events into tradable contracts. That structure can produce useful pricing on public expectations, but it also creates risks when the outcome depends on information held by governments, military officials, or insiders close to decision-making.
Politics-related contracts account for 12% of notional trading volume on Polymarket, according to Dune data. On Kalshi, they account for 0.7% of weekly notional trading volume. The difference reflects distinct market structures, but both platforms face the same challenge: how to manage contracts where the informational edge may come from privileged access rather than public analysis.
