What happened on the platform
Polymarket opened an internal review after a flurry of well-timed bets on Israel's election landed right before polls closed Tuesday. Those positions paid quickly after some exit polls indicated Netanyahu's party secured more seats than early reads suggested, and together some accounts have already taken out more than $100,000.
A Bloomberg check of the public ledger found hundreds of freshly made accounts placing wagers on Netanyahu and Likud to beat rivals. An initial Bloomberg News analysis also spotlighted more than 600 wallets spun up that day with no prior trades, backing either Netanyahu to win the premiership or Likud to take the most seats. Many of those wallets are sitting on sizable unrealized gains.
What investigators are looking at
Polymarket's internal team said it is reviewing dozens of new wallets tied to the election markets. Two analytics firms with a track record of uncovering insider activity in prediction markets, Polysights and Bubblemaps, told Bloomberg they consider the trades suspicious and have begun deeper analysis. Every transaction on Polymarket's international crypto exchange is on-chain, which makes the activity visible, though Bloomberg emphasized the early read is not definitive and that separating insider use from original research or luck is challenging when markets churn through millions of orders each minute.
Investigators are focusing on two markets: one asking if Netanyahu will become the next prime minister, and a second assessing whether Likud will end up with the most seats. After polls closed on Tuesday, odds for Netanyahu on Polymarket jumped to 59% while Gadi Eisenkot's fell to 21%. Since mid-July, traders on the platform had consistently assigned Eisenkot a higher chance of leading next, echoing polls showing weaker support for Netanyahu.
Money flows and red flags
Some of the new accounts have already realized profits, while others are positioned for more. One newly created wallet could net around $180,000 if both the Netanyahu and Likud outcomes settle in its favor. That wallet was funded with roughly $39,995 from Tron-based addresses that blockchain explorers had previously tagged for malicious activity and for interacting with sanctioned wallets.
Separately, Polymarket briefly froze trading on Thursday and contacted law enforcement after user reports of stolen funds. The company said a third party was compromised, and trading resumed about an hour later.
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The broader pattern and policy pushback
These election wagers add to a run of precisely timed bets tied to sensitive political developments. Earlier this year, Israeli authorities brought charges against a reservist and a civilian, alleging they exploited classified military intelligence to wager on Polymarket about Israel's security operations in Iran. In the U.S., prosecutors charged soldier Gannon Ken Van Dyke, alleging he leveraged extremely sensitive details of a military operation in Venezuela to make more than $400,000 on Polymarket.
On Thursday, Senators Elizabeth Warren and John Curtis sent a letter to Polymarket and rival Kalshi questioning how well the platforms can police insider trading and manipulation in election-linked markets. "The identification of isolated instances of improper trading does not demonstrate that these markets are adequately protected," they wrote. "Instead, it raises serious questions about how much similar activity may be going undetected."
What this means for your portfolio
In plain English: prediction markets can move fast, leave a public footprint, and still raise fairness and security concerns. The current probe, combined with fresh political pressure from Washington, underscores that odds on high-stakes events can shift quickly and may later face scrutiny. If you trade these markets, the transparency cuts both ways - there is a trail, and regulators and researchers are following it.
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