Polymarket CEO Shayne Coplan has made the case that people trading on insider information is actually good because it gives the public a more accurate view of what is going to happen. In a painful case of “the worst person you know just made a great point,” the Israeli government apparently does not agree. According to a report from the Financial Times, Israeli authorities have pressed charges against two citizens, including a military reservist, for allegedly using classified military information to place bets on Polymarket.
The charges were brought by Shin Bet, Israel’s internal security agency, which launched an investigation into suspicious trades made on Polymarket last year. According to the Wall Street Journal, the bets were placed last June and were related to Israel’s 12-day war with Iran. The accounts in question reportedly placed bets on what day and month Israel would mount an attack on Iran and when the country would end its operation.
One of the alleged accounts involved in the insider trading scheme had the username ricosuave666, according to the Times of Israel. That account made a total of seven predictions and profited more than $150,000 on those bets. The account was reportedly deleted once Shin Bet launched its investigation, per WSJ.
“This constitutes a severe ethical failure and a clear crossing of a red line,” the Israeli military said in a statement, going on to insist the actions are “not in line with IDF values and what is expected of servicemembers.” For what it’s worth, the IDF was found by the United Nations to have committed a genocide against Palestinians in Gaza, so if you’re keeping score at home, the deliberate and systematic killing of a population is within the military’s values, but profiting off insider information is a bridge too far.
Polymarket and other prediction markets like Kalshi have become a hotbed of insider trading, which the companies have taken to positioning as a feature and not a bug. In December, a Polymarket trader cashed out over $1 million in bets on what Google’s annual top search trends would be. Just last week, a trader made a cool $400,000 by accurately predicting a ton of bets on the Super Bowl halftime show. Another bettor made $400,000 by predicting the ouster of Venezuelan President Nicolás Maduro.
While organizations like the Israeli military obviously aren’t thrilled to have their information traded on in a public market, people like Coplan welcome it. “I think what is cool about Polymarket is that it creates this financial incentive to divulge information to the market,” he told Axios last year. When asked about markets relying on people trading on insider information during an interview with 60 Minutes, Coplan said, “I think people going and having an edge to the market is a good thing.”
In the case of the bets on Israeli military operations, the country’s authorities said that ultimately “no operational harm was caused in this specific incident.” But there’s no guarantee that’ll be the case in the future. People have made a habit out of hunting apparent insiders—usually people who have just created accounts and placed significant bets on outcomes—to ride their coattails. There’s little reason to think that information couldn’t also be sussed out by, say, an opposing military and used to counter an incoming offensive. On the other hand, Coplan called insider trading “super cool,” so you gotta consider that side of things.
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