Polymarket Reviews Suspicious Trades Linked to Israeli Election

Polymarket said it is reviewing suspicious trades that may be linked to Israel's general election on October 27. Hundreds of newly opened accounts profited from two contracts on the Likud party of Prime Minister Benjamin Netanyahu, placed just before voting closed. One contract concerned the next prime minister, while the other addressed which party would win the most seats in parliament.

Analytics firms Bubblemaps and Polysights found that large sums were invested in new accounts before the polls closed. Bubblemaps determined that 101 accounts received their initial funds on election day, before voting ended. Some traders were reported to have sold their positions for profit after exit polls came out. The total profit of some accounts exceeded $100,000.

A wallet that bet $14,000 twelve minutes before polls closed sold its position for about $42,000 as the odds shifted. Polymarket said it was reviewing dozens of new wallets and had reported the matter to law enforcement. However, the current findings do not show whether the traders had access to insider information.

The incident has raised concerns about insider trading and manipulation on prediction markets. In February, Israeli authorities referred two people to court on charges of betting ahead of a military operation against Iran using confidential military information. Polymarket also experienced a security incident on October 29, when third-party JavaScript code linked to the monitoring provider DebugBear was compromised, and it briefly halted trading. Analytics firms estimate that 737 accounts may have been affected and losses could reach $2.73 million. The platform acknowledged the incident and said it would cover losses for affected users.