Polymarket Refers Dozens of Accounts to DOJ Over Suspected Military Insider Trading

According to CNN, Polymarket, a prediction market platform, has referred "dozens" of accounts that have shown signs of military insider trading to the Department of Justice. 

"The referrals, which have not been previously disclosed, pertained to accounts flagged by a watchdog group in a report published Thursday, but the referrals predated the report," CNN's Marshall Cohen said. 

The group was the Anti-Corruption Data Collective, which CNN mentions is a nonpartisan organization, that found 152 accounts that profited about $8 million on war markets, including the Iran war. The Justice Department didn't comment to CNN, and Polymarket is considered to have done nothing wrong. 

Watchdog Flags 152 Accounts With $8 Million in Profits

This news comes after the Justice Department charged a Special Forces soldier with using military secrets to profit at prediction markets related to the capture of Venezuelan president Nicolás Maduro. Also, a former teleprompter operator for President Donald Trump was under investigation for profiting off of "Mentions" markets related to speeches Trump made. 

Backing the group, they found a large number of accounts that were brand-new wallets and "placed remarkably well-timed bets with longshot odds. They had a staggering 97% win rate." A senior Polymarket official "agreed that these are often clues suggesting insider trading, but they stressed that those patterns alone don’t prove wrongdoing."

There was recently a meeting, the first-ever Innovation Advisory Committee and the Commodity Futures Trading Commission, where subjects like this were discussed. 

Polymarket Investing in Surveillance Technology

Polymarket founder and CEO Shayne Coplan mentioned that the company hired a "former FBI official who built “custom, proprietary surveillance software” for Polymarket’s platform."

“We talk with our partners – Palantir, Chainalysis – and they’re like, ‘damn, you guys have this in-house? This is serious!’” Coplan said. “We’re grateful to have that, and we continue to invest more in it.”

As CNN notes, there have been pushes to have more regulation regarding prediction market platforms, including a bipartisan coalition of 44 state attorneys general. 

“We have a national security infrastructure designed to keep things secret,” said Michelle Kendler-Kretsch, one of the watchdog group’s researchers, per CNN. “Providing an opportunity for someone to break that seal of secrecy, just to make some money, puts our entire national security structure at risk.”