So there’s something quite interesting happening in the prediction market world. It turns out six accounts on Polymarket managed to generate around $1.2 million in a way that… hmm, the timing is too perfect to be considered a coincidence. They placed “Yes” bets on a market questioning whether the US would attack Iran on February 28, and boom — the attack actually happened a few hours after they took their positions.

What’s intriguing is the detail uncovered by Bubblemaps. These six accounts were created only in February, mostly funded within 24 hours before the attack occurred, and then no further activity afterward. They jumped right in, bought large positions at a cheap price — (around 10.8 cents per share) — and waited for the outcome. One account alone bought over 560,000 shares and netted nearly $560,000 when the market settled at $1.00. This pattern is too structured to be random trading.

The attack itself triggered significant market movements — Bitcoin briefly dropped, while oil futures on Hyperliquid spiked. So this isn’t just about prediction markets, but about information that was clearly known before the public found out.

What makes this a hot topic is the evolving regulatory context. The CFTC has already warned about potential insider trading in prediction markets. Even Kalshi, a competitor of Polymarket, recently suspended two users and fined them for insider trading — including a visual effects editor from MrBeast suspected of trading based on unpublished event results. Kalshi has more than a dozen active investigations underway and has examined around 200 cases. They’ve even banned employees for two years and imposed fines over $20,000 in certain cases.

And this is just the beginning. Reports indicate some Polymarket traders even engaged in insider trading on markets designed to catch insider traders themselves. ZachXBT announced he would publish an investigation into the crypto platform (Axiom), and suddenly Polymarket created a contract about which platform would be named. Lookonchain then identified 12 wallets that aggressively placed bets on Axiom before the announcement was made. This is basically meta-level insider trading.

Regulators like the CFTC position exchanges as the first line of defense in this matter. But with volumes reaching nearly $90 million just on the February 28 contract — (part of the $529 million wagered since December) — it’s clear there’s a lot of money moving here. The question now is how platforms will respond and whether more accounts will be suspended or investigated.

This phenomenon highlights the gap still existing between market speed and enforcement speed. Prediction markets are growing, but regulation is still lagging behind. It will be interesting to monitor in the coming months.