Polymarket Pulls Bet on Missing US Pilot After Political Backlash. Congress Wasn’t Happy.

TLDR

• Polymarket removed a prediction market betting on the rescue of a missing US airman shot down over Iran
• Rep. Seth Moulton called the market “DISGUSTING” and publicly pressured the platform to take it down
• Polymarket said the listing violated its “integrity standards” but did not name which rule was broken
• Concerns are growing about insider trading on prediction markets after traders made $1M betting on US strikes on Iran
• 42 Democratic lawmakers have urged the CFTC to warn federal employees against using non-public information to trade on these platforms

Polymarket removed a prediction market that let users bet on the rescue of a missing US airman after an F-15E fighter jet was shot down over Iran on Friday. One crew member was rescued, but another remained unaccounted for.

The market asked users to bet on which day US authorities would confirm the rescue of the two airmen. Over 60% of bettors had wagered the rescue would not be confirmed by Saturday.

Polymarket responded on X, saying it took the market down immediately because it did not meet its integrity standards. The platform also said it is investigating how the listing passed its internal safeguards.

However, Moulton pushed back on that explanation. In an email to CNBC, he said Polymarket took the market down because they were called out publicly, not because of a rule violation.

Users and journalists also questioned Polymarket’s response. Business Insider correspondent Jack Newsham wrote on X that he reviewed the platform’s Market Integrity page and terms of service but could not find which specific rule applied.

Growing Calls for Regulation

Moulton has been one of the louder voices in Congress calling for oversight of prediction market platforms. Last month, he banned his staff from using platforms like Polymarket or Kalshi, which his office believes is the first such ban in Congress.

He also pointed out that Donald Trump Jr., who he claims is an investor in Polymarket, may have access to non-public intelligence. Requests for comment from Trump Jr. were not returned to CNBC.

A group of congressional Democrats introduced legislation last month that would ban prediction markets from offering wagers on elections, war, government actions, and sports.

In February, six Democratic senators urged the CFTC to clarify it would prohibit contracts related to an individual’s death, calling them a national security risk.

The CFTC announced lawsuits on Thursday against three states over efforts to bypass its authority over prediction markets.

Insider Trading Concerns Mount

Separately, a group of traders made around $1 million by correctly betting on the timing of US strikes on Iran. Some placed trades just hours before the attacks using newly created wallets focused almost entirely on strike-related bets.

At least 42 Democratic lawmakers have since urged the CFTC and the Office of Government Ethics to warn federal employees against trading on prediction markets using non-public information.

Polymarket stated it does not charge fees on geopolitical markets. The platform has seen daily fees jump from $363,000 to over $1 million following a broader fee expansion on March 30.

As of Saturday, Polymarket’s war category listed 223 active bets, up from 219 the previous day.

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