According to new research on activity on the Polymarket International platform, public registries of prediction markets can turn insider trading into a signal that other traders and bots can copy.
The non-profit organization Anti-Corruption Data Collective reported that over 150 wallets on the platform may have been trading on insider information about the U.S. military.
The specialists analyzed all of Polymarket's settled markets as of May 5 and identified "risky" bets. These are defined as bets of at least $2,500, placed within an hour, on outcomes with a probability of 35% or lower.
They identified 556 wallets, which they dubbed "killer whales." Such traders often opened accounts, quickly made successful risky bets on niche markets where insiders could have an informational advantage, and then withdrew funds and disappeared.
Out of these wallets, 152 were particularly successful in military and defense industry markets. According to the research, they earned a total of $8 million and had an average win rate of 97.2%.
Interestingly, U.S. soldier Gannon Ken Van Dyke, who was charged in April with alleged trading on Polymarket related to classified information, built up his positions more slowly and was not among the 152 accounts mentioned.
The teams at Polymarket and Kalshi are making efforts to prevent abuse. In particular, Kalshi plans to collect information about the employment of traders seeking access to specific contracts that may be linked to insider information or manipulation.
