The alleged insider trading incident involving a Green Beret and a $400,000 bet on a Venezuelan raid may be just the tip of the iceberg. A recent report by the Anti-Corruption Data Collective, a non-profit research organization, has analyzed over 435,000 Polymarket contracts and $54.4 billion in trading volume, uncovering a pattern of unusually high win rates in low-probability bets on military and defense outcomes.
These success rates, which have reached as high as 50% in some cases, are difficult to explain by skill or luck alone, and may indicate a broader issue of insider trading or information asymmetry. The report's findings are consistent with previous research, which has shown that a small group of traders, roughly 3%, drive price discovery on Polymarket, and that profits are highly concentrated, with less than 1% of wallets capturing around half of all gains.
The study examined the June 2025 US strikes on Iran as a case study, finding that a small number of traders placed large, well-timed bets on the outcome, despite the Pentagon's efforts to keep the operation secret. The report's authors suggest that this may be evidence of a systemic issue, and recommend measures such as identity verification, conditional payouts, and restrictions on certain markets to prevent insider trading and protect the integrity of the platform.
The report ultimately calls for a broader debate about the ethics of allowing the public to bet on military and defense outcomes, and whether such markets are inherently susceptible to information asymmetries and insider trading.