Israeli Authorities Indict Two in Polymarket Insider Betting Probe - Crypto Economy

TL;DR

• A Tel Aviv court indicts a reservist and a civilian for using classified information on Polymarket.
• The suspects placed wagers on military operations related to Iran in June 2025.
• Shin Bet detected betting patterns aligned with restricted operational data.

A Tel Aviv District Court indicted an Israel Defense Forces reservist and a civilian for using classified military information to place wagers on the prediction market platform Polymarket related to military operations. The formal charges include serious security offenses, bribery, and obstruction of justice, according to a prosecution-approved outline released after a partial lifting of a gag order.

The investigation unfolded during an active wartime period marked by heightened operational sensitivity. Authorities allege that the suspects used confidential details concerning the timing of military actions connected to Iran in June 2025 to inform their betting activity. Prosecutors requested that the court extend the defendants’ detention until the conclusion of legal proceedings.

The case resulted from a joint operation involving the Shin Bet (Israel Security Agency), an investigative unit within the Defense Ministry, and the Israel Police. Intelligence teams identified betting patterns that aligned with restricted operational information accessible to personnel in service. Consequently, investigators reviewed transaction data on the platform and traced links between the suspects and specific wagers.

Prediction markets face scrutiny over insider information risks

The indictment does not involve senior defense officials, despite speculation circulating online in recent weeks. Israeli media clarified that prosecutors did not frame the charges as intent to harm state security. Nevertheless, the case has intensified debate regarding the vulnerability of prediction markets to insider activity.

Platforms such as Polymarket allow users to buy and sell shares tied to future events. When individuals with access to sensitive information participate, they can distort pricing signals and create informational asymmetries for other traders. Therefore, market integrity depends on internal compliance controls and coordination with law enforcement authorities.


In the weeks preceding the indictment, Israeli outlets reported that the Shin Bet examined unusual Polymarket activity connected to military developments. Crypto Economy analysts observed high-confidence wagers that appeared to anticipate operational decisions with unusual accuracy. Such patterns raised concerns about potential information leaks within defense structures.

The court continues to restrict publication of the defendants’ identities and detailed descriptions of the wagers. Moreover, the partial lifting of the gag order permits disclosure only of information approved by prosecutors. Authorities justified the limitations on grounds of national security and protection of investigative sources.

Security experts note that leaks do not always require direct transmission of documents. In some cases, participation in financial or prediction markets by individuals with privileged access can generate detectable signals.