Polymarket investigates suspected insider trading on Israeli election markets

Investigation into suspicious trading activity

Polymarket is investigating whether insider trading compromised markets centered on the Israeli election and Prime Minister Benjamin Netanyahu’s performance in the Oct. 27 contest, the platform confirmed.

Prediction market data analytics firms Polysights and Bubblemaps flagged hundreds of newly created accounts making deposits on the blockchain ledger for the first time shortly before polls closed on Tuesday. The suspicious accounts executed well-timed trades on the Israeli election that quickly turned profitable, with some netting over $100,000 after exit polls indicated Netanyahu’s Likud party would win more seats than previously projected.

Many of the Polymarket accounts in question were created less than an hour before voting closed at 10 p.m. local time in Jerusalem. One trader risked $14,000 just 12 minutes before the polls closed and cashed out the stake for $42,000 hours later after the market adjusted to the exit polling.

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 confirmed that the platform is investigating the matter but did not issue a public statement.

Trading volume on Israeli election

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?”

Previous insider trading cases

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 is accused of making $32,500 in trades related to when Venezuelan leader Nicolás Maduro would be removed from power and his well-timed Polymarket trades made him a profit of $409,000.

In May, federal prosecutors charged a Google security engineer with making over $1 million in fraudulent profits by using insider information to predict the outcome of Google-related search markets. 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.