A group of newly created accounts on the prediction market Polymarket made precise and well-timed bets regarding the potential for a ceasefire between the U.S. and Iran on April 7, resulting in significant financial gains amounting to hundreds of thousands of dollars. These bets were placed just hours before a two-week ceasefire was publicly announced.
Prior to the announcement, tensions were heightened as President Donald Trump issued alarming statements on social media, warning that “a whole civilization will die tonight” if Iran did not comply with his demands concerning the Strait of Hormuz by his 8 p.m. ET deadline. Despite the tense environment and minimal indications that a ceasefire agreement was imminent, at least 50 new accounts placed substantial “Yes” bets earlier that day, just before Trump confirmed the ceasefire on his Truth Social platform around 6:30 p.m. ET.
One notable wallet, created on Tuesday around 10 a.m. ET, placed approximately $72,000 in “Yes” bets at an average price of 8.8 cents. With the buy-in for each betting event ranging between $0 and $1, reflecting user predictions, this particular user managed to cash out with a profit of $200,000. Another account, registered on April 6 and also betting on the ceasefire event, reported a profit of $125,500.
Another wallet, created just 12 minutes before Trump’s announcement, placed $31,908 in “Yes” bets at a value of 33.7 cents per bet, leading to an estimated profit of $48,500. The higher betting price at that moment may have been influenced by last-minute diplomatic efforts from Pakistan, which sought to persuade Trump to extend his ultimatum by an additional two weeks.
There is speculation that the individuals behind these bets may have anticipated Trump’s eventual backtracking, based on his historical pattern of making bold threats only to later retreat. Critics of Trump have coined the phrase “Trump Always Chickens Out,” or TACO, in reference to this behavior.
While some traders reaped substantial profits, others now face delays in receiving payouts, as Polymarket has categorized the April 7 ceasefire contract as “disputed.” This classification could take up to 48 hours to resolve due to ongoing Iranian restrictions on ships transiting the Strait of Hormuz and continuing missile attacks in the region. Public blockchain data does not reveal the identities behind the new wallets since Polymarket employs proxy smart contract wallets, allowing single users to create multiple accounts.
Polymarket did not respond to inquiries regarding the matter. Representative Blake Moore, a Republican from Utah, expressed concerns about the integrity of these trades, stating that it is “highly unlikely” they are genuine and more probable that they involve insiders who had advanced access to information. He emphasized the potential risks, noting that without appropriate regulations, individuals in government or military positions could exploit their access for personal profit.
The trading patterns observed among new Polymarket accounts reflect a troubling trend similar to prior instances on the platform, where newly established accounts placed significant bets just before notable political events, such as the January capture of Venezuelan President Nicolás Maduro. These accounts consistently managed to earn considerable profits, raising alarms among the public and lawmakers regarding the potential misuse of insider information within prediction markets.
Bipartisan groups in Congress have proposed legislation aimed at expanding the definition of insider trading to encompass activities in prediction markets. Even industry leaders at Polymarket and Kalshi recognize the necessity for regulatory measures to ensure market integrity.
Todd Philips, a professor at Georgia State University with expertise in prediction markets, stressed the importance of regulation, stating that allowing individuals to trade with insider information compromises the trust and fairness of the market for honest traders.
