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Israel indicted two citizens for allegedly using classified information to place wagers on the prediction platform Polymarket, according to a statement made by authorities on Thursday.  The news renewed concern that prediction markets make it easier to engage in insider trading for profit.  Sponsored Sponsored Israeli Agencies Target Military Insider Betting Case In a joint statement, the Israeli Defense Ministry, Israel Police, and the Shin Bet said the suspects — an army reservist and a civilian — were arrested on suspicion of placing bets on Polymarket about potential military operations.  “This was allegedly based on classified information to which the reservists were exposed through their military duties,” the statement said. The announcement comes weeks after Israeli public broadcaster Kan News reported on the matter. The outlet said security agencies had opened an investigation into the suspected misuse of classified information within the defense establishment. The report alleged that the information was used to place bets on Polymarket, including on the timing of Israel’s opening strike on Iran during the 12-day war in June 2025. These platforms have seen a surge in wagers on geopolitics, crypto, politics, and sports. Although marketed as alternatives to traditional gambling, their structure closely mirrors conventional betting markets. Insider trading in prediction markets: – CFTC regulates prediction markets and has specific rules that restricts certain types of insider trading (like trading on non public government info) – CFTC has different insider trading rules than the SEC – For CFTC there’s not the… — Nick Tomaino (@NTmoney) February 12, 2026 Users buy and sell shares tied to real-world outcomes, with prices ranging from $0.01 to $1.00 reflecting the market’s implied probability of each outcome. Sponsored Sponsored Their accessibility, pseudonymity, and ease of use have also prompted concerns about potential insider trading and misconduct. Are Prediction Markets Exploitable…

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Filed under: News - @ February 12, 2026 11:18 pm