Polymarket has removed a market that allowed users to bet on the detonation of a nuclear weapon this year. The platform faced widespread criticism on social media for the controversial contract.
The market, titled "Nuclear weapon detonation by...?", had attracted over $838,000 in volume. Polymarket had previously posted a 22% probability of a nuclear weapon detonation by year-end.
Analyst Dustin Gouker described betting on nuclear weapons as "grotesque" and harmful to the legitimacy of prediction markets. He warned that such speculation could send false signals and profit from insider information.
Prediction markets are increasingly facing accusations that their conflict-related markets are being used for insider trading. U.S. lawmakers and international regulators are now paying close attention.
Reports indicate significant sums were bet on recent geopolitical events, with some traders reportedly profiting from foreknowledge. Blockchain analytics firms have identified suspected insiders netting substantial amounts before conflicts began.
This is not the first time Polymarket has faced such accusations. Similar controversies have arisen from bets related to political arrests and military actions.
Rival platform Kalshi also encountered issues with a market concerning the removal of an Iranian leader, leading to settlement disputes after the individual's death.
Gouker cautioned that war and death-related markets could damage the credibility of prediction markets, potentially making them appear as avenues for insider enrichment.
The U.S. Commodity Futures Trading Commission (CFTC) is advancing formal rulemaking for prediction markets, aiming to establish a single federal standard. CFTC Chairman Michael Selig has prioritized this regulatory effort.