Polymarket Faces 'Information Laundering' Fears After Iran and Maduro Bets

Ukraine has blocked access to the prediction market platform Polymarket, classifying its activities as unlicensed gambling under national law. The decision was issued by the National Commission for the Regulation of Electronic Communications on Dec. 10, 2025, under Resolution No. 695. The ruling requires internet service providers to restrict access to online resources that organize, conduct, or facilitate gambling without a valid license. As part of the enforcement, the domain polymarket.com has been added to Ukraine's public register of blocked websites, effectively cutting off local access to the platform.

Trading volume on Polymarket has surged in early 2026, with a record $701.7 million in trading activity on Monday. Prediction market Kalshi accounted for two-thirds of total trading volume at $465.9 million, while competitors Polymarket and Opinion tallied $100 million worth of trades.

The rise in trading activity has occurred despite regulatory scrutiny in the US and internationally.

The ban on Polymarket comes as Ukrainian authorities have criticized the platform for facilitating bets on geopolitical events linked to Russia's invasion. Polymarket allows users to buy and sell shares tied to the outcome of real-world events, with prices reflecting market-implied probabilities rather than fixed odds. The platform has been restricted across 33 other countries, including France, Germany, the United Kingdom, and Australia.

Why the Move Happened

Ukraine cited unlicensed gambling as the reason for the ban. The National Commission for the Regulation of Electronic Communications ruled that prediction market activities do not meet legal definitions of licensed gambling operations. This move follows similar actions in other jurisdictions concerned about the financialization of political and geopolitical events.

Ukrainian authorities have also criticized Polymarket for facilitating bets on events related to the ongoing war with Russia. The platform allows users to speculate on the outcomes of military and political developments, which has drawn legal and ethical scrutiny.

How Markets Responded

Trading volumes on Polymarket have not been deterred by regulatory action. In early January, the platform saw a surge in bets related to Iran's leadership, with the probability of Supreme Leader Ayatollah Ali Khamenei leaving office by the end of 2026 rising to 56%. The market volume for the event exceeded $5.5 million in just four days.

The most notable event driving attention was the capture of Venezuelan President Nicolás Maduro by US forces on Jan. 3. A highly profitable bet placed on Polymarket—before the capture— paid out more than $400,000 to a user who invested roughly $30,000. This has raised concerns about insider knowledge and prompted legislative proposals to restrict insider trading on prediction markets.

What Analysts Are Watching

Ukrainian lawmakers are among those pushing for stricter regulation. US Representative Ritchie Torres has introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would bar federal officials from trading on political or policy outcomes when in possession of nonpublic information.

Legal experts are also monitoring a recent classified opinion from the Department of Justice, which argues that President Donald Trump was not constrained by international law when authorizing the capture of Maduro. This could set a legal precedent for future international operations and influence the regulatory environment for prediction markets.

Market analysts are closely tracking the concentration of profits among a small group of users. On-chain data indicates that fewer than 0.04% of trading addresses on Polymarket captured over 70% of realized profits, exceeding $3.7 billion in 2025. This disparity raises questions about accessibility and fairness in prediction markets.

As geopolitical tensions continue to rise, prediction markets are increasingly seen as both a tool for assessing risk and a potential regulatory concern. The interplay between market activity, political events, and legal frameworks is likely to shape the future of this emerging financial sector.