Polymarket Faces Congressional Heat After Removing Controversial Bet on Missing Airman

Key Takeaways

• A prediction market betting on whether a missing U.S. airman would be found was deleted by Polymarket following intense criticism
• Massachusetts Representative Seth Moulton condemned the market as “DISGUSTING” and demanded its immediate removal
• The platform claimed the market violated internal integrity policies but failed to specify which rule was breached
• Suspicions of insider trading have emerged after bettors earned $1 million predicting the exact timing of U.S. military action against Iran
• A coalition of 42 Democratic members of Congress has called on the CFTC to issue warnings against federal workers exploiting classified information on trading platforms

A controversial prediction market on Polymarket was shut down after allowing users to wager on the outcome involving a missing U.S. airman whose F-15E fighter jet was downed over Iranian territory on Friday. While one crew member was successfully recovered, the second remained missing at the time.

The betting market prompted users to predict when U.S. officials would announce the recovery of both crew members. More than 60% of participants had placed bets indicating the rescue would not be verified by Saturday.

In a statement posted on X, Polymarket announced it had swiftly removed the market for failing to comply with its integrity standards. The company added that it was launching an investigation to understand how the listing bypassed its review processes.

Yet Moulton dismissed this explanation. Speaking to CNBC via email, he argued that the platform only acted after facing public criticism, not due to any genuine policy violation.

Several users and members of the media also challenged Polymarket’s justification. Jack Newsham, a correspondent for Business Insider, noted on X that after examining the platform’s Market Integrity guidelines and terms of service, he was unable to identify which specific regulation had been violated.

Increased Pressure for Federal Oversight

Moulton has emerged as a prominent congressional advocate for stronger regulation of prediction market services. Last month, he implemented a prohibition preventing his staff from engaging with platforms such as Polymarket or Kalshi, a move his office believes represents the first such restriction in Congress.

He has also raised concerns that Donald Trump Jr., whom he alleges has financial ties to Polymarket, might have access to classified intelligence. CNBC reported that attempts to reach Trump Jr. for comment were unsuccessful.

Last month, a coalition of Democratic legislators introduced a bill seeking to prohibit prediction markets from accepting bets on elections, military conflicts, governmental decisions, and sporting events.

In February, six Democratic senators petitioned the CFTC to establish clear prohibitions on contracts tied to individual fatalities, citing them as threats to national security.

On Thursday, the CFTC filed legal actions against three states for attempting to circumvent its regulatory jurisdiction over prediction markets.

Allegations of Insider Trading Intensify

In a separate incident, multiple traders reportedly profited approximately $1 million by accurately predicting when U.S. military strikes against Iran would occur. Some participants placed their bets mere hours before the attacks commenced, using recently established wallets that focused almost exclusively on strike-related wagers.

Following these revelations, at least 42 Democratic legislators have called on the CFTC and the Office of Government Ethics to issue explicit warnings prohibiting federal employees from leveraging classified information when participating in prediction markets.

Polymarket has disclosed that it does not collect fees on geopolitical prediction markets. However, overall daily platform fees have surged from $363,000 to more than $1 million since implementing a broader fee structure on March 30.

As of Saturday, Polymarket’s war-related category featured 223 active betting markets, representing an increase from 219 the day before.

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