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 jointly 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 actively 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 traders staked large wagers on Netanyahu and his coalition performing better than pre-election polling suggested, with one account risking $14,000 just 12 minutes before polls closed. That trader cashed out the stake for $42,000 hours later after market prices adjusted to exit poll data.
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 was accused of placing over $32,000 in trades related to the operation targeting Venezuelan leader Nicolás Maduro, with his well-timed positions yielding more than $400,000 in profits.
In May, federal prosecutors charged a Google software engineer with generating over $1.2 million in illegal profits by using confidential internal search data to trade on the company’s annual “Year in Search” rankings.
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.
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