Classified Intel, Crypto Bets, and a Gag Order: Inside Israel’s Polymarket Security Scandal

Israeli authorities have indicted an Israel Defense Forces (IDF) reservist and a civilian for allegedly using classified military information to place bets on the popular prediction market platform Polymarket. According to The Times of Israel, Israeli authorities have indicted an IDF reservist and a civilian on suspicion of exploiting classified military information to place bets on the prediction market platform Polymarket. Use of Classified Information The indictments follow a joint investigation by the Defense Ministry, the Shin Bet, and the Israel Police, which led to the arrest of several suspects, including additional reservists. Investigators allege that reservists used sensitive information they were exposed to through their military duties to make bets tied to future military developments. Prosecutors have filed charges against one reservist and one civilian for what authorities described as severe security offenses, along with bribery and obstruction of justice. A court-issued gag order is currently in place, preventing the release of further details about the investigation, including operational specifics and the full scope of those questioned. In a joint statement, the defense establishment warned that placing bets based on classified information creates a real and serious threat to IDF operations and to state security. The agencies added that such conduct is treated with the utmost severity and that authorities will act decisively against anyone involved in the unlawful use of secret material. The case comes a month after the Shin Bet was examining suspicions that someone within the defense establishment had used classified information to bet on Polymarket. That report drew attention to a Polymarket account operating under the name “ricosuave666,” which placed several highly accurate bets in June 2025 related to Israeli military operations in Iran. According to the report, the user bet tens of thousands of dollars and made an estimated profit of around $150,000. Market Manipulation Concerns Polymarket’s growing popularity has attracted both casual traders and high-profile participants. Among them is Vitalik Buterin, who recently disclosed earning about $70,000 last year on the platform by betting against outcomes he believes were highly irrational. Polymarket also hosted more lighthearted but widely shared bets, such as comparisons showing that the odds of confirming alien life in 2025 were higher than Bitcoin reaching $200,000, especially during periods of extreme market stress. While the platform has seen rapid growth and occasional large payouts, it has also faced scrutiny over concerns related to manipulation and the potential misuse of insider information. According to a recent study by researchers at Columbia University, transaction patterns on Polymarket indicative of wash trading began rising in July 2024 and peaked at nearly 60% of reported volume in December of the same year. Researchers found that the activity continued through late April 2025, and later climbed again to about 20% of volume in early October 2025. The post Classified Intel, Crypto Bets, and a Gag Order: Inside Israel’s Polymarket Security Scandal appeared first on CryptoPotato .