Polymarket investigates suspicious trading around Israeli election markets

The prediction market platform Polymarket is looking into whether insider trading affected its markets tied to the Israeli election and to how Prime Minister Benjamin Netanyahu would perform in the Oct. 27 vote. The company gave no public statement, yet it confirmed the probe when asked.

Polysights and Bubblemaps, two firms that analyze prediction market data, spotted hundreds of accounts opened just before the Tuesday close of voting, each depositing on the blockchain ledger for the first time. Those accounts then made well-timed bets on the Israeli election that soon paid off, and together some of them cleared over $100,000 once exit polls showed Netanyahu's Likud party outperforming earlier forecasts. Israeli exit polls come out as soon as polling stations shut.

A large share of the flagged accounts came into being within the final hour before polls shut at 10 p.m. Jerusalem time. Numerous traders bet heavily that Netanyahu and his bloc would beat earlier news projections; one put $14,000 at risk only 12 minutes ahead of the close, then sold the position for $42,000 hours afterward as the market caught up with the exit polling.

In a post on X, Polysights put the potential payouts for a Netanyahu win at over $700,000, coming from what it called “fresh wallets with no trading history.” The same post noted that the odds on Netanyahu had jumped by more than 35 cents across two days and that its tools had detected heavy YES buying by new wallets within 24 hours.

Trading on the event titled “Prime Minister of Israel after the next election?” has exceeded $81.2 million on Polymarket's international platform. The report also pointed out that people who produce exit polls and election officials can reach sensitive data usable as insider information on such platforms, and that party operatives watching polling stations along with staff at internal polling firms might gain nonpublic intelligence in the same way.

The report also referenced prior cases tied to the platform. Federal prosecutors in May accused a Google security engineer of collecting more than $1 million in fraudulent profits, allegedly by exploiting insider information to “predict” results in search markets connected to Google. In September, the DOJ was confirmed by federal authorities to be looking into a KPMG accountant accused of using nonpublic audit data to gain $22,000 on the earnings results of 18 publicly traded companies. The April case involved Army Special Forces Master Sgt. Gannon Ken Van Dyke, whom the U.S. Department of Justice charged with using classified military secrets on Polymarket; his trades concerned when Venezuelan leader Nicolás Maduro would be removed from power, and prosecutors say those trades produced a $409,000 profit for him.