Israeli authorities have indicted a reservist from the Israel Defense Forces (IDF) along with a civilian. They are suspected of using confidential military information to make bets on Polymarket, a well-known prediction market platform.

According to reports from The Times of Israel, the investigation revealed that individuals exploited classified insights from their military experience to gamble on anticipated military actions.

Use of Classified Information

These indictments are the result of a collaborative probe conducted by the Defense Ministry, Shin Bet, and the Israel Police. This investigation has already seen the arrest of multiple suspects, including further reservists. Allegations suggest that sensitive, confidential data accessed during military service was leveraged for wagers about upcoming military events.

Charges are pending against the reservist and the civilian for serious security violations, as well as for bribery and obstruction of justice, surrounded by a gag order that restricts the release of further specifics about the case.

The defense establishment has issued a stark warning regarding the risks posed by betting rooted in confidential information, stating it jeopardizes the integrity of IDF operations and national security. They emphasized the severity of such actions and reassured that legal repercussions will follow for any individual involved in the illegal use of secret information.

This incident surfaces just weeks after an inquiry by Shin Bet into possible insider trading activities using privileged knowledge on Polymarket. Recent investigations pointed to a user dubbed “ricosuave666” who made several precise wagers regarding Israeli military maneuvers in Iran.

Reports indicate this user staked substantial amounts, potentially leading to earnings of $150,000.

Market Manipulation Concerns

Polymarket’s upscale appeal has attracted various bettors, from casual participants to notable figures. Vitalik Buterin, a prominent name in crypto, recently disclosed a profit of around $70,000 gained from betting against outcomes he deemed irrational on the platform. Polymarket has also seen its share of whimsical bets, such as predictions about confirming extraterrestrial life as compared to Bitcoin hitting $200,000, highlighting a disparity especially noticeable during market volatility.

Despite its rapid expansion and significant payoffs, Polymarket has also faced scrutiny for potential manipulation and misuse of classified intelligence. A study by Columbia University researchers noted a surge in transaction patterns suggestive of wash trading, escalating to nearly 60% of the total reported volume by December 2024, with similar activities ongoing into April 2025 and once again peaking at about 20% in early October 2025.