Senator calls for insider trading ban following US strike in Iran leading to $1.2 million profit.

Senator Chris Murphy plans to propose legislation to prohibit the betting on military actions following suspicious trading activities on prediction markets ahead of a U.S. strike on Iran. His decision to introduce the bill came after it was revealed that several accounts made substantial profits on Polymarket contracts linked to the strike. This move was fueled by widespread concerns that individuals were profiting from war and tragedy.

Data revealed that six wallets collectively earned around $1.2 million through betting on Polymarket contracts titled “US strikes Iran by February 28, 2026?” Bubblemaps, a blockchain analytics company, identified these wallets, showing concentrated betting just hours before the strike event. Notably, public trading records indicated a surge in “Yes” shares purchases shortly before the strike, resulting in significant profits for these accounts once the strike occurred.

For instance, the profile named “Anon” bought about $10,000 worth of “Yes” shares and later cashed in over $55,000, while “dicedicedice” redeemed close to $150,000 from the same contract. Similarly, another account showed profits exceeding $119,000 in one month, with a focus on the Iran strike market. Moreover, a congressional representative highlighted the enormous profits made by an account called “Magamyman,” emphasizing that the first trade was executed just over an hour before the strike news went public, converting $87,000 into more than half a million dollars overnight.

The crackdown on prediction markets is gaining traction, with Senator Murphy’s imminent legislation being part of a broader effort to regulate such practices. Last month, Democratic lawmakers supported the Public Integrity in Financial Prediction Markets Act of 2026, aiming to restrict elected officials from trading contracts related to policies they oversee. The contentious nature of this issue is exemplified by the Polymarket contract focused on tensions between the U.S. and Iran, with heightened tensions fueling speculation in global markets.

Furthermore, pressure is mounting on prediction markets, particularly those linked to geopolitical events. The CFTC, represented by Mike Selig, expressed its support for prediction markets, emphasizing the integral role they play in the regulatory landscape. Selig underscored that event contracts do not fall under gambling laws but are regulated as derivatives, warning that compromising federal oversight could jeopardize market integrity, investor protection, and the country’s global financial reputation.

Thus, the scrutiny on prediction markets following the suspicious trading activities preceding the U.S. strike on Iran has prompted calls for stricter regulations. This move aims to curb unethical profiteering from sensitive geopolitical events, ensuring market integrity and investor protection in the face of escalating tensions worldwide.