Polymarket, the billionaire and the war profits: When truth becomes a moral minefield

It wasn't meant to turn out like this. When a 21-year-old Shayne Coplan sat on his bathroom sofa in 2020, cobbling together the code for what would become Polymarket, the dream was to build a "truth machine". A place where collective intelligence, not pundits, would set the price on reality. According to sources close to him, he was broke and desperate, but fiercely convinced that markets always tell the truth. Five years on, he's sitting on a fortune that has smashed through the billion-dollar mark, voted the crypto world's youngest self-made billionaire, and his platform has become both the darling of Wall Street and a politician's nightmare.

The recent drama surrounding Iran shows just how quickly things can escalate. When Israeli warplanes eliminated Iran's Supreme Leader Ali Khamenei in late February, it wasn't just intelligence agencies that were paying attention. In the hours before the attack, over $850,000 had been dumped on Polymarket in what looked like pure insider trading. 150 anonymous accounts bought, for thousands of dollars each, on the bet that the attack would happen within 24 hours. When the bombs eventually fell and the markets settled, around 20 accounts were left with profits of over $100,000 each. A trader I chat with on Discord simply said: "Someone knew something. That wasn't luck."

It's a development that makes even die-hard libertarians stop and think. When the heavyweight opinion pages on Wall Street last week labelled Polymarket and its competitor Kalshi as little more than bookmakers in disguise, it wasn't some left-wing commentator shouting – it was the financial establishment putting its foot down. And they have a point. When you listen to the latest episode of Richtig Wetten #30, which dives deep into this exact type of non-sports betting, you can hear for yourself how quickly it gets uncomfortable. It's no longer about who wins the Super Bowl, but about when the next coup d'état will happen.

The bathroom legend who sold the truth to ICE

Shayne Coplan has always been a different kind of tech founder. He inherited nothing, never finished his degree at NYU, and had more or less emptied his bank account when, at the start of the pandemic in 2020, he put his laptop on a laundry basket in the bathroom and started building. That exclusive biography that came out last spring, "The Truth Trader", paints a picture of a young man living on instant noodles and defying everyone who said it was impossible. His vision was to build a counterweight to traditional media and opinion polls – "people don't trust the establishment, let them speak with their wallets instead".

And it worked. The 2024 Trump victory became Polymarket's big breakthrough, with the platform week after week showing a far more certain Trump win than any polling institute dared to predict. It gave the platform a cult status among traders and crypto enthusiasts. But it was when ICE, the owner of the NYSE, barged in with a $20 billion investment last autumn that things got serious. Suddenly, a 27-year-old from downtown New York was in the same room as the world's most established finance sharks. Coplan himself tweeted something about "$BTC $ETH $BNB $SOL $POLY", and the entire crypto world began speculating about an imminent launch of the platform's own token.

The only problem is that while the boardroom smells of expensive suits, the product itself increasingly resembles a pitch-black moral grey area. To understand the scale of it, we need to look at the manoeuvres in the legal jungle. Here's a snapshot of how authorities worldwide have tried to handle the phenomenon:

• USA (2022): The federal financial regulator fines Polymarket $1.4 million and forces them to block US users.
• Europe (2024-2025): France, Switzerland and Poland block the site, citing domestic gambling laws. The platform agrees to geo-blocking.
• Singapore (2025): Authorities shut off access, citing both the payment services act and the gambling act – a double blow.
• New York (Nov 2024): FBI raids Shayne Coplan's apartment, seizes his phone – but no charges are ever filed. The investigation is dropped in the summer of 2025.

The last point is perhaps the most telling. Coplan's comment after the raid – "new phone, who dis?" – signals an attitude that certainly works when you have "regulatory arbitrage" as your business model. You play the game, move the pieces, and the constant question is: when will someone finally draw a definitive line?

Death as a commodity

The recent Iran crisis has become a sort of litmus test for the entire industry. On Polymarket alone, over $500 million has been turned over in contracts linked to US military action in the Middle East. Internally leaked figures show that the volume of "geopolitical events" has doubled in just six months. One of the more macabre moments occurred when competitor Kalshi, after Khamenei's death, was forced to backtrack on its payouts. They simply hadn't counted on death being forbidden under their own rules, and ended up having to transfer all the money back. It's hard not to smile at the bureaucracy, but equally hard not to shudder.

When Senator Chris Murphy, a Democrat from Connecticut, says that "this is worse than insider trading – it means people with access to decisions about war and peace could have a financial incentive to push for an attack", it's no longer a question of moral panic. It's about the possibility that some of the 16 accounts now cashing out six-figure sums might have been in the same room as the decision-makers. My contacts in Washington confirm that investigators are now looking into whether there are links to individuals within the intelligence community.

At the same time, it's easy to understand why institutions like ICE got involved. Because in an age of disinformation and polarisation, a market-based truth machine is appealing. If you disregard the macabre nature of profiting from bombs, the idea that the price of an asset reflects collective wisdom is still beautiful. The academic research that Coplan pored over during his broke, vagabond years shows that markets often beat the experts.

What now for $POLY?

The question everyone is asking right now, of course, is what happens with that $POLY token that Coplan hinted at. Because if Polymarket is really going to continue growing, it needs a working revenue model. So far, the platform has largely lived off venture capital, with minimal fees and a principle of not acting as a counterparty in any trade. A token could change that – creating an ecosystem where early users are rewarded, and the platform takes a cut of every transaction.

But a token also brings increased scrutiny. Securities regulators have already started looking at similar structures, and if $POLY is classed as a security, then we're in a whole new legal quagmire. Add to that the fact that Kalshi recently signed a deal with Robinhood, blurring the line between traditional stock trading and pure speculation. It's not hard to see the outlines of a future ecosystem where your pension fund manager simultaneously speculates on who will be the next Pope.

Personally, I can't help but admire Shayne Coplan's journey. The kid who couldn't afford rent five years ago, who sat in his bathroom coding because he believed in transparency, is now the public face of an industry that turns over more than the GDP of some small nations. But it's also a reminder that success rarely comes for free. When you buy the truth at a price, you risk selling your soul in the process.

For Brits curious to try: don't forget that it's illegal for UK gambling companies to offer this type of product, and as a UK citizen you could find yourself in a grey area if you actively seek out foreign platforms. But as with everything else in the crypto world: where there's demand, there's always a way. The only question is where that path leads.