More than 150 Polymarket wallets may have traded on military secrets. (This...is bad....)

By Douglas Gillison WASHINGTON, Aug 20 (Reuters) - More than 150 wallets on Polymarket International may have traded on inside U.S. military information, attracting copycat bets and raising concerns that the market could broadcast signals exploitable by foreign adversaries, according to research published on Thursday.

The analysis by the nonprofit research group Anti-Corruption Data Collective, first reported by Reuters, sheds new light on likely military insider trading on the prediction market and the broader risks such activity may pose.

It comes as policymakers increase scrutiny of the booming industry following bets ahead of U.S. military actions, including that of a U.S. soldier charged in April with using classified information to bet on the removal in January of Venezuela President Nicolas Maduro, which lawmakers have said could hurt national security.

Spokespeople for Polymarket, which was founded in 2020, did not respond to requests for comment. Polymarket says it has strict controls, closely monitors for suspicious activity and has referred dozens of trader wallets to the authorities, including the Maduro case.

Polymarket's international platform settles trades on a blockchain, meaning wagers are public, although traders remain anonymous. ACDC analyzed all settled markets through May 5 to identify "long-shot" bets, which it defines as wagers of at least $2,500 placed cumulatively in an hour or less on an outcome with odds of 35% or less.

Within that universe, ACDC found 556 wallets it dubbed "Orcas," a nod to the killer whale's precise and selective hunting tactics. These traders typically opened an account and quickly placed a highly successful long-shot bet in niche markets where insiders may have an informational edge, before in many cases cashing out and disappearing.

Of those, there were 152 exceptionally successful wallets that bet on military and defense markets, making $8 million collectively, with an average win rate of 97.2%.

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