Senator Murphy Accuses White House Insiders of Profiting from Iran Strike Bets on Polymarket
On March 5, 2026, Senator Chris Murphy (D-CT) announced he will introduce legislation this month to prohibit trading on prediction markets tied to government actions, including military strikes, foreign policy decisions, and official statements. The bill would ban contracts that resolve based on or correlate to such events.
In a video posted to his official X account, Murphy directly alleged that individuals with advance knowledge from inside the White House likely placed the winning bets on Polymarket’s “US strikes Iran by Feb. 28, 2026?” contract:
“Obviously, there are people close to Donald Trump who on Friday knew what was happening on Saturday. And it is very likely, probable even, that the people that placed those bets were people with inside information.”
He added that allowing such bets creates perverse incentives:
“If we continue to allow people to bet on war, on military strikes, then you’re going to have people inside the situation room who are making decisions not based on what’s good for national security … but based upon whether they’ll make money off of war.”
Murphy’s proposal would include exceptions for financial markets (e.g., bond trading, Fed decisions). Rep. Mike Levin (D-CA) is preparing a companion bill in the House.
Bubblemaps-Flagged Wallets Net Nearly $1 Million
The senator’s comments directly reference onchain analysis from Bubblemaps, which identified six freshly funded Polymarket wallets that collectively netted $989,191 (initially estimated at $1.2M) by purchasing “Yes” shares on the February 28 strike contract hours before the U.S.-Israeli airstrikes began early Saturday morning.
Largest confirmed winners:
- Top wallet → $494,375 net profit (560,680 “Yes” shares bought at 10.8¢)
- “Planktonbets” → $173,907 net
- “Dicedicedice” → $119,964 (400% return)
- “Neodbs” → $88,954 (900% return)
All six wallets were funded within ~24 hours of the strike, bet specifically on the February 28 resolution date, and fully exited after the event resolved “Yes.”
Contrasting Massive Loss on the Opposite Side
One trader (“anoin123”) reportedly lost $6.5 million in a single day after previously accumulating $2M+ profit betting against strikes. The account was heavily positioned on “No” when the attacks were confirmed.
Growing Pattern of Suspected Insider Trading on Prediction Markets
This is not the first time Polymarket geopolitical markets have faced insider-trading allegations:
- January 2026 → New wallet bet $32K on Maduro ouster → $400K+ profit in 24 hours
- June 2025 → Israeli reservist & civilian indicted for betting on Iran strike timing using IDF intelligence → $150K+ combined profit
- February 2026 → ZachXBT Axiom probe contract → suspected insiders made ~$500K profit
The “US strikes Iran by…?” contract family has generated over $529 million in volume since December 2025.
Regulatory & Political Pressure Mounting
Kalshi CEO Tarek Mansour has previously defended informed traders as beneficial for price discovery. However:
- Six Democratic senators led by Adam Schiff sent a letter to CFTC Chairman Michael Selig (March 9 deadline) urging a ban on death-correlated contracts
- Sen. Chris Murphy is now expanding that push to cover all government actions
- The Coalition for Prediction Markets (including Kalshi) maintains regulated platforms already prohibit death contracts
Polymarket received CFTC approval as a regulated exchange in late 2025 but continues to face criticism over geopolitical market integrity.
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