Headline: Israeli reservist and civilian indicted for allegedly using classified IDF intelligence to bet on Polymarket An Israel Defense Forces reservist and a civilian have been indicted for allegedly using classified military information to place wagers on Polymarket, spotlighting new risks at the intersection of insider information and decentralized prediction markets. What happened - A Tel Aviv court recently approved publication of an indictment charging the two defendants with serious security-related offenses, bribery and obstruction of justice. Prosecutors say the reservist accessed internal military intelligence through his army role and passed operational details to the civilian, who used that information to place bets tied to Israeli military actions on Polymarket. - The case was brought by the State Attorney’s Office cyber division after a joint investigation by police, the Shin Bet internal security agency and the Defense Ministry’s Arazim investigations unit. Authorities emphasized neither defendant holds a senior defense post. Why this matters for crypto markets - Polymarket is a blockchain-based prediction market where users buy and sell “yes/no” contracts on real-world events. The platform operates pseudonymously via crypto wallets, making it harder to link on-chain activity to specific individuals. - The probe was triggered by unusually accurate wagers on military outcomes, including bets linked to alleged Israeli operations in Iran in June 2025. Reports say one anonymous Polymarket account made several precise predictions about strikes and timing, generating significant profits — an anomaly that drew investigators’ attention. Broader implications - The indictment raises questions about how decentralized, pseudonymous platforms can be abused to monetize classified or insider information and the challenges regulators and investigators face when tracking on-chain activity back to real-world actors. - Israeli authorities warned that betting on the basis of classified information endangers operational security and national defense, and that exploiting secret material for financial gain could undermine military secrecy. What to watch - Whether this case prompts calls for greater oversight of prediction markets, stronger KYC/AML practices on crypto platforms, or new legal precedents around using classified information in on-chain markets. - Any public statements or policy moves from Polymarket or other prediction market operators addressing insider-use risks or platform safeguards. This developing story underscores the friction between crypto’s pseudonymity and state security concerns — a tension likely to draw more attention as on-chain markets continue to grow. Read more AI-generated news on: undefined/news