Israeli authorities have arrested and charged two people for allegedly using secret information to place bets on Polymarket’s prediction market related to an Israeli attack on Iran.
In a joint statement issued on Thursday, Israel’s Ministry of Defense, its Shin Bet internal security service and the police said he said a military reservist and a civilian were arrested after an investigation found that the reservist had obtained classified information in order to place bets.
Prosecutors will bring criminal charges for security crimes, bribery and obstruction of justice. Authorities said the reservist worked for the Shin Bet.
Prediction markets have been hit by major insider trading scandals this year after a Polymarket user won a bet that Nicolás Maduro would be ousted as Venezuela’s president just hours before he was captured by US forces, netting around $400,000.
Israeli state news service Kan reported last month, Polymarket user “ricosuave666” placed several bets related to Israeli military operations in Iran in June 2025, but it is unknown whether those arrested are behind the account.
The account reportedly had tens of thousands of dollars wagered and earned more than $152,300 by placing bets on markets such as “Israeli attack on Iran on June 24” and “Israeli military action against Iran by Friday,” with the latter winning more than $128,700.
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Prediction markets pose a real security risk if misused
Lawmakers around the world have expressed concerns that insider knowledge could be exploited in prediction markets, undermining market integrity and undermining public trust.
Israel’s Ministry of Defense said betting based on classified information poses a “real threat to the security of IDF and national activities,” adding that Israeli military, security and police units will continue to take action against anyone who illegally uses classified information.
A lawyer representing a reservist he said Bloomberg said the indictment was “flawed” and added that the charge of harming national security had been dropped.
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