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A pattern that goes back decades
The controversy surrounding suspiciously well-timed bets on Polymarket ahead of the US and Israeli strikes on Iran has drawn widespread attention — but for anyone with a long memory, the story has a familiar ring. More than two decades before prediction markets existed, traders were already finding ways to profit from catastrophe.
Eight days after the September 11 attacks, CBS News reported a striking anomaly: an unusually high volume of “put” options — bets that a stock would fall — had been placed against American Airlines and United Airlines in the days immediately before the hijackings. Traders who bought American Airlines puts on September 10 ultimately pocketed over $5 million as the company’s share price collapsed by 39% in the aftermath. A near-identical pattern emerged with United Airlines on the Chicago Board Options Exchange four days before the attacks, with a heavily skewed ratio of put options to call options raising immediate red flags.
The 9/11 Commission ultimately found no conclusive evidence of insider trading, with some of the trades attributed to hedging strategies — a conclusion that satisfied few observers at the time, and one that echoes uncomfortably in the current debate.
The Iran strikes and a $1.2 million windfall
Fast forward to 2026, and the mechanics are different but the questions are the same. Blockchain analytics firm BubbleMaps identified six Polymarket accounts that collectively earned $1.2 million by betting on the precise date of the US strike on Iran — with most accounts funded less than 24 hours before the attacks took place.
One account, operating under the name “Magamyman”, placed its first trade just 71 minutes before news of the strikes broke. Betting at nearly 17% odds, the trader turned an $87,000 investment into $515,000 — with total profits from Iran-related trades exceeding $700,000. Overall trading volume on contracts tied to the timing of the strikes reached $529 million on Polymarket, with a separate market on whether Iran’s Supreme Leader Khamenei would be removed from power attracting over $62 million in trades.
This is not the first time Polymarket has been at the centre of suspected insider trading. Earlier this year, a trader converted a $32,000 bet on Venezuelan President Nicolás Maduro’s removal from power into more than $400,000.
Prediction markets in the crosshairs
The Iran episode has intensified scrutiny of prediction platforms at a sensitive moment. Kalshi, which explicitly prohibits insider trading in its ruleset, found itself scrambling to defend its “no trades based on death” policy as it attempted to settle a market on Khamenei’s removal. Polymarket, by contrast, has no such prohibition — and comments from CEO Shayne Coplan have led some observers to conclude that insider trading is, at least implicitly, treated as an acceptable feature of the platform rather than a flaw to be corrected.
With Polymarket preparing its full US launch — the Iran markets were available only on the international version of the platform — the pressure to address these questions is only going to grow. Whether or not the platform chooses to act, one thing remains clear: where insiders are winning, someone else is always losing.
