Just hours before U.S. President Trump announced a two-week ceasefire agreement with Iran, there was an unusually concentrated spike in wagering on the decentralized prediction platform Polymarket. An on-chain analysis based on Dune showed that at least 50 wallets purchased "yes" contracts for "U.S.-Iran will ceasefire" on April 7, despite these wallets having never bet on the event before. Earlier that day, Trump was still threatening on social media that if Iran didn't comply with requirements to open the Strait of Hormuz, "civilization would be wiped out tonight," making these wagers a stark contrast to public expectations at the time.
One wallet, created around 10 a.m. Eastern Time, invested about $72,000 at an average purchase price of 8.8 cents, eventually making a profit of approximately $200,000. Another wallet, created just 12 minutes before Trump's ceasefire tweet, invested about $31,908, with an estimated profit of about $48,500. Another wallet, which joined the platform on April 6, specifically to trade this event, showed a profit of approximately $125,500. According to the public on-chain records, these were the first transactions for the related wallets.
Core Controversy
However, the existing evidence is not sufficient to prove that these transactions necessarily involved illegal insider information. AP pointed out that Polymarket uses a proxy smart contract wallet architecture, meaning theoretically, the same user can create multiple wallets; public blockchain data cannot identify actual controllers. In other words, the market currently sees "suspicious transactions with extremely precise timing," rather than an enforcement conclusion with completed identity penetration.
This grey area is at the core of the prediction market controversy. In March, Reuters quoted CFTC Enforcement Director David Miller, stating that regulators have noted suspicions of insider trading in prediction markets and made clear they are "watching closely"; he also emphasized that if event contracts are deemed swaps or similar derivatives, insider trading laws equally apply. Meanwhile, the Trump administration has sued Arizona, Connecticut, and Illinois this month, claiming states have no right to regulate platforms like Polymarket and Kalshi as gambling businesses, indicating that the federal and state jurisdiction boundary remains unclear.
Larger Market Context
Notably, this was not the first set of "timely" trades around the U.S.-Iran situation. Reuters reported on April 8 that prior to Trump announcing the ceasefire, another trader sold about 8,600 lots of Brent and WTI crude oil futures in the oil market, with a nominal wager size of approximately $950 million; oil prices plunged about 15% post-announcement. Looking further back, Reuters also reported about a $500 million crude oil bet before Trump announced a delay in hitting Iranian energy facilities, and several accounts on Polymarket collectively earned about $1.2 million in profit on the eve of the Iranian Supreme Leader Khamenei's assassination.
Contracts Yet to Be Settled
The reason the ceasefire bets have not been fully realized is that the real-world situation itself is still unclear. Polymarket has marked the April 7 U.S.-Iran ceasefire contracts as "disputed" because Iran continues to impose restrictions on the Strait of Hormuz passage and missile attacks in the region have not entirely ceased. Reuters reported on April 9 that within the 24 hours following the ceasefire, only one oil tanker and five bulk carriers passed through the Strait of Hormuz, far below the pre-war daily average of about 140 vessels, indicating that "ceasefire has been declared" does not equate to "agreement fully executed."
