Detonation

Polymarket has pulled a controversial market that had asked traders to bet on whether a nuclear weapon would be detonated this year, after the contract drew widespread backlash across social media.

The event, titled “Nuclear weapon detonation by…?” had attracted major trading activity on the prediction platform, with data visible on the site previously showing more than $838,000 in volume, with contracts tied to several timelines, including March 31, June 30, and before 2027.

Before archiving, Polymarket had posted a 22% probability of a nuclear weapon being detonated by year-end on X.

“I think it’s pretty clear we shouldn’t have betting on nuclear weapons being used in a conflict,” Prediction market analyst Dustin Gouker told Decrypt. 

“Whatever small amount of utility we might get from learning the probability of that happening is offset by how terrible it is to let people speculate on that outcome,” he said. “You can also send false signals on this if the market is thinly traded. And obviously, people profiting from inside information is grotesque.”

Decrypt has reached out to Polymarket for comment.

Prediction markets such as Polymarket are facing mounting accusations that their war and conflict markets have become vehicles for insider trading, allegations now drawing the attention of U.S. lawmakers and international regulators alike.

In the hours before the U.S. and Israel struck Iran, more than 150 accounts placed four-figure bets correctly predicting an American strike by the following day, a late surge totalling around $855,000, according to a New York Times analysis of Polymarket trading data.  

Meanwhile, a trader operating under the username “Magamyman” walked away with over $553,000 betting on the strike and the fate of Ayatollah Ali Khamenei. 

Blockchain analytics firm Bubblemaps identified six suspected insiders who collectively netted $1.2 million on Polymarket in the hours before the conflict began, noting most of the accounts were relatively new and had traded specifically on a strike by Saturday.

It is not the first time Polymarket has faced such accusations. In January, an anonymous trader made over $400,000 on suspiciously timed bets before Venezuelan President Nicolás Maduro’s arrest, while Israeli authorities last month charged two people for allegedly using classified military intelligence to place wagers during the country’s 12-day war with Iran.

Rival platform Kalshi has faced similar controversies after a market on the removal of Iranian leader Ayatollah Ali Khamenei drew more than $54 million in trades, with the exchange invoking a “death carveout” clause to settle positions at the last traded price rather than paying out in full after his death was confirmed.

Gouker warned that markets tied to death and war could make it harder for prediction markets to gain mainstream credibility, adding that many people may ultimately see the system as “an endeavour to enrich insiders as a result.”

“The problem is there is no regulation of Polymarket International,” he said. “While Polymarket does have a regulated prediction market under the CFTC, that agency doesn’t have any direct say over what happens at the international site.”

“And by allowing it to have a CFTC entity in the U.S., it seems to be tacit approval of the rest-of-world site,” the analyst added.

The CFTC has submitted an advance notice of proposed rulemaking to the President’s budget office this week, the preliminary step that allows it to consult stakeholders before drafting formal rules. 

CFTC Chairman Michael Selig, who was sworn in just over two months ago, has made prediction market regulation an early priority, with a single federal standard across all 50 states as the stated goal.