There is an interesting story from Polymarket worth noting. Six accounts managed to generate around $1.2 million by predicting a U.S. attack on Iran on 28 Februari. Bubblemaps, a blockchain analytics firm, detected a rather suspicious pattern from this activity.

What’s interesting is the timing. The wallets were newly created in February, funded within 24 hours before the attack actually took place, and immediately bought Yes positions on the prediction contract. One account even purchased more than 560,000 shares at about 10,8 cents per share— a position that ultimately paid nearly $560,000 when the market settled at $1. Another account bought nearly 150,000 shares at 20 cents. All accounts had only one activity: this bet.

Bubblemaps also made a visualization showing these six wallets grouped together and funded through similar routes. This clearly isn’t a coincidence. The attack itself triggered a significant market reaction—bitcoin’s price fell while oil futures on Hyperliquid rose, consistent with expectations regarding the impact of regional conflict.

Most interesting of all is the regulatory context. The week before, Kalshi (kompetitor Polymarket) had already detained and fined two users for insider trading, including a visual editor for Beast Games who was suspected of trading based on knowledge of event results that had not been published. Kalshi said it had investigated about 200 cases and had more than a dozen active investigations.

The CFTC itself has already issued an advisory about the potential violation of insider trading in event contracts. Trading volume on the 28 Februari contract reached nearly $90 million—part of more than $529 million total wagered in markets related to this since December. With trading volume that high over the contract, suspicious activity should have been easy to detect.

This isn’t the first case. Recently, Polymarket traders also appeared to have engaged in insider trading in a market designed to catch insider trading itself. When blockchain investigator ZachXBT revealed that he would publish findings about the crypto platform ( ternyata Axiom, where employees are allegedly using unpublished information), some parties clearly already knew the answer. Lookonchain identified 12 aggressive wallets placing bets on Axiom before the announcement.

How insider trading works in these prediction markets shows a real regulatory gap. Kalshi has been proactive—banning employees for two years and fining more than $20,000 for a single case. But Polymarket still seems to lack enforcement as strong as that. This will be a serious test case for how regulators oversee insider activity in the rapidly evolving prediction market ecosystem.