Polymarket’s Shayne Coplan Faces Heat as Sen. Blumenthal Demands Answers on War-Time Bets

With the White House warning staff about betting on sensitive events, Richard Blumenthal is pressing Coplan for answers.

After the White House warned its staff last month against placing bets on prediction markets, a US senator is demanding that Polymarket answer questions about how anonymous traders have repeatedly made six- and seven-figure sums by placing bets minutes before major classified military decisions became public.

Sen. Richard Blumenthal (D-CT) sent a letter last week to Polymarket founder and CEO Shayne Coplan, asking for a response by April 24 regarding what he described as the platform’s failure to prevent insider trading in national security matters. 

He sent the letter days after three accounts on the platform earned over $600,000 by correctly predicting the timing of last week’s U.S. ceasefire with Iran. The users started buying those contracts in March and April at less than 35% odds and have since changed their handles, Bubblemaps reported on X.

The “suspected insiders” were among six that made a total of $1.2 million by betting the US would attack Iran by Feb. 28

“Polymarket has become an illicit market to sell and exploit national security secrets unlike any in history,” Blumenthal wrote to Coplan. He added that the prediction market acts as a “potential honeypot of foreign intelligence services” that use the platform to monitor suspicious bets.

White House Issues Staff Warning

The White House Management Office sent a staff-wide email on March 24, reminding employees of rules prohibiting the use of government information for personal financial gain, according to The Wall Street Journal. The office sent the email one day after President Donald Trump announced a sudden pause in strikes against Iran.

In the 15 minutes before that announcement, traders moved over $760 million in oil futures contracts in less than two minutes. Critics immediately raised concerns that someone with advanced knowledge acted on that information.

The White House confirmed the letter’s authenticity to The Wall Street Journal, and Trump spokesperson Davis Ingle said that the president has been “crystal clear” that all government officials cannot use non-public information for financial benefit. He rejected any suggestion that insiders profited from these positions.

Pattern of Suspicious Bets

The Iran ceasefire wagers mark the latest in a series of highly profitable trades that traders timed suspiciously around U.S. military action. One trader made over $400,000 by betting on the imminent removal of Venezuelan President Nicolas Maduro less than five hours before the U.S. intervention. 

Weeks later, as Israeli and U.S. airstrikes killed Iranian Supreme Leader Ali Khamenei, multiple accounts had already positioned themselves against him, with one account clearing more than $550,000 just two hours before the strikes.

Israeli authorities arrested several people in February after suspecting them of using classified military information to place bets on Israeli operations through Polymarket. Blumenthal noted in his letter that Polymarket has taken in more than half a billion dollars in direct bets on when the U.S. and Israel would strike Iran.

Sen. Blumenthal Wants Answers

Blumenthal alluded to Coplan commenting earlier this year that financial incentive for insiders to leak information is a positive feature of Polymarket.

“What’s cool about Polymarket is that it creates this financial incentive for people to go and divulge the information to the market,” Coplan said earlier this year.

In his letter, Blumenthal responded:

 “The financial incentive to abuse trust apparently worked.” 

Senator Blumenthal posed five questions to the company. 

• Why the platform still hosts bets on military action and heads of state 
• What internal investigations it has launched regarding the suspicious Venezuela and Iran insider trading activity 
• Whether Poymarket previously reported suspicious accounts to federal authorities 
• What identity verification is required from users
• Why U.S. users can use a VPN to bypass geographic restrictions so easily.

Blumenthal introduced the Prediction Market Security and Integrity Act last month, which would tighten oversight of these platforms and restore regulatory authority to states. He also joined Sen. Andy Kim (D-NJ) to push for an outright ban on contracts related to war or military action.

Polymarket explicitly banned insider trading only last month, following the introduction of new legislation in Congress that aims to ban prediction markets from offering sports-related contracts. Polymarket revised its rules to explicitly state that users can’t trade on contracts if they have insider information or the power to influence an event’s outcome.

With the clock ticking toward April 24, Polymarket now faces mounting pressure to explain how these bets slipped through.

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