Israel Indicts Two Over Polymarket Iran Bets

Prosecutors are pursuing charges including security offenses, bribery, and obstruction of justice. Separately, in the United States, Connecticut resident Elmin Redzepagic has been charged in a 21-count federal indictment alleging he defrauded investors of nearly $1 million in a cryptocurrency scheme, lost the funds on the offshore gambling platform Stake.com, and committed wire fraud, international money laundering, and false statements to IRS agents. 

Israel Moves Against Insider Wagers

Israeli authorities have arrested and indicted two individuals for allegedly using classified information to place bets on the prediction market platform Polymarket concerning potential Israeli military action against Iran. In a joint statement that was released Thursday, Israel’s Defense Ministry, the Shin Bet internal security service, and police said the case involves a military reservist and a civilian who were detained after an investigation.

According to authorities, the reservist — who was working for Shin Bet — obtained secret military information and used it to inform bets placed on Polymarket. Prosecutors intend to pursue criminal charges that include security-related offenses, bribery, and obstruction of justice.

Announcement from the Ministry of Defence

The case attracted a lot of attention because prediction markets allow users to wager on real-world events, including geopolitical developments and military actions. Israeli officials warned that using insider knowledge in such markets creates a “real security risk” to Israel Defense Forces operations and broader national security activity. The Defense Ministry added that military, security, and police units will continue taking action against anyone who unlawfully uses classified information.

The Israeli state-owned news outlet Kan previously reported that a Polymarket account under the name “ricosuave666” placed multiple bets related to Israel’s military operations in Iran in June of 2025. The account reportedly wagered tens of thousands of dollars and earned more than $152,300 in profits, including over $128,700 from a market predicting Israeli military action against Iran by a specified date. It is still unclear whether the two individuals arrested are connected to that account.

The case follows concerns about insider trading risks in prediction markets. Earlier this year, controversy emerged after a Polymarket user profited approximately $400,000 from a bet predicting that Venezuelan President Nicolás Maduro would be ousted shortly before he was captured by US forces.

A lawyer representing the reservist argued that the indictment is flawed and stated that a charge related to harming national security has been dropped, though other charges are still in place. The case is expected to proceed through the Israeli court system.

Connecticut Man Charged in Crypto Fraud

Meanwhile, a Connecticut man has been charged in a sweeping federal indictment alleging he defrauded investors out of almost $1 million in a cryptocurrency scheme that prosecutors say unraveled into gambling losses and international money transfers.

The US Department of Justice announced Thursday that Elmin Redzepagic of Connecticut faces a 21-count indictment tied to alleged crypto-related fraud. According to prosecutors, Redzepagic presented himself as a seasoned cryptocurrency investor capable of delivering high returns, and persuaded people to entrust him with their funds between May of 2021 and March of 2025.

Press release from the US Attorney’s Office

Authorities allege that instead of investing the money as promised, Redzepagic lost close to $1 million belonging to others on the offshore gambling platform Stake.com. Prosecutors say he reassured investors about the status of their supposed profits and encouraged them to commit more funds, following what officials described as a familiar pattern of deception that is very often seen in investment fraud schemes.

The indictment includes three counts of making false statements to IRS Criminal Investigation agents, seven counts of wire fraud, and 11 counts of international money laundering. Each count of making a false statement carries a maximum penalty of five years in prison, while the wire fraud and international money laundering charges each carry potential sentences of up to 20 years per count if convicted.

Federal authorities allege that Redzepagic misrepresented the nature and performance of the investments by claiming to generate impressive returns while fabricating explanations to maintain investor confidence. Among the alleged tactics were false claims that additional “gas fees” were required to unlock or withdraw profits that did not exist. Prosecutors contend that these statements were used to delay withdrawals and secure further payments from victims.

The Justice Department also said Redzepagic claimed to operate as part of a team that included an individual referred to as “The Chef,” whom he described as a ringleader. It is not clear whether “The Chef” is a real person or whether any more suspects are under investigation.

Redzepagic pleaded not guilty during a court appearance on Thursday, and was released on a $500,000 bond. If convicted on all counts, he faces the possibility of decades in prison.