Polymarket is back under the microscope after a series of high-stakes geopolitical bets sparked fears that prediction markets are being used to launder insider knowledge into public narratives. The latest drama follows a now-infamous Maduro trade earlier this month, where an anonymous wallet turned a $30,000 bet into over $400,000 by wagering that Venezuela’s president would be removed from office just hours before US forces captured him. President Trump later claimed a Venezuelan leaker connected to the operation was already in jail.
Blockchain analytics firm Lookonchain now shows that two of the three wallets tied to those Maduro profits have been dormant for 11 days, fueling speculation that law enforcement or exchanges may have intervened. The third wallet, however, has re-emerged. That same wallet placed a new wager two days ago, predicting that Iran’s Supreme Leader Ayatollah Ali Khamenei would be out of power by January 31—a market that remains open as nationwide protests continue across Iran.
Meanwhile, Polymarket traders have already suffered major losses on Iran-related bets. Earlier this week, one heavy wallet placed a massive “Yes” position on whether the United States would strike Iran by January 14. As protests escalated and Iran temporarily closed its airspace, Polymarket odds surged to 51%, with nearly $50 million in trading volume flowing into the market. But the strike never materialized. Iran reopened its airspace after four hours. President Trump said he had been told that protester executions had stopped. The market resolved “No,” wiping out 255,817 shares held by the trader and turning a potential $160,000 payout into a total loss of about $40,000.
That failed trade has not calmed concerns. Instead, analysts now argue that some traders may be using Polymarket to shape, not just predict, geopolitical narratives. This tactic has become known as “information laundering.” It involves placing an early bet, allowing copy-traders and social media to amplify the trade, then reversing position once the market moves. Because Polymarket odds are widely shared on X and Telegram as real-time signals of geopolitical risk, a single well-timed bet can generate headlines, trigger trading bots, and move sentiment before any public confirmation exists.
Lawmakers are already watching closely. After the Maduro trade, Representative Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would ban US officials from trading on markets tied to government actions when they hold nonpublic information. The bill has dozens of House co-sponsors but has not yet moved to a vote and has no Senate companion. So far, no evidence links the Iran trades to US insiders. But the pattern of sudden large bets, viral odds shifts, and rapid reversals is pushing prediction markets into a new and more dangerous spotlight. The risk now is not just who is betting, but how those bets themselves may be shaping what the world believes is about to happen.
