Israeli authorities have charged a reservist and a civilian with using classified military information to place bets on the Polymarket prediction market. The charges, filed after an interagency investigation, were described by authorities as a serious security breach with potential operational consequences.
The indictment was filed on February 12, treating the matter as a threat to national security rather than a simple financial crime. To investigate its scope, multiple agencies were involved, including the IDF’s Information Security Department, the Military Police’s Criminal Investigation Division, and the Ministry of Defense’s security department, under the supervision of the State Prosecutor’s Office’s Cyber Department.
According to the charges, an IDF reservist allegedly accessed classified operational information during his active duty and shared it with a civilian. The civilian allegedly used this information to place multiple bets on Polymarket. Among the information, prosecutors cite reports related to a supposed planned attack against Iran in June 2025 and information concerning the Iron Dome air defense system.
Authorities maintain that the use of classified information in a prediction market not only represented an undue financial advantage but also a concrete operational risk. In a joint statement, the Shin Bet and the Israel Police asserted that the bets constituted “a real risk to IDF operations and to state security,” emphasizing that the case would be handled with the “utmost severity.”
Platform, fefense, and how this impacts Polymarket
In the indictment, Polymarket is identified as the platform where the bets were allegedly placed. While the company has argued in the past that insider information can contribute to greater accuracy in prediction markets, the court documents highlight the lack of clarity regarding how policies related to the use of sensitive information are applied or monitored in this specific context.
For its part, the defense rejected the charges. A lawyer described one of the accused as a “highly respected individual who has made a significant contribution to Israel’s security” and called the indictment “improper,” further alleging “selective application” of the law.
Beyond the legal proceedings that will now continue, the case opens a broader debate. For prediction markets, this implies potential regulatory and reputational pressure, especially when the events being bet on overlap with classified information or national security matters. For authorities, the episode exposes a potential channel for monetizing sensitive intelligence.
Consequently, increased scrutiny of these platforms’ internal rules, compliance, and cross-border cooperation is likely, in an environment where insider trading can generate risks that extend far beyond the financial realm.
