Two Israeli citizens have been formally charged with exploiting highly classified military intelligence to place wagers on the outcomes of future events, according to a statement released by Israeli authorities on Thursday. The individuals, identified as a civilian and a military reservist, are accused of committing "serious security offenses" that pose a direct threat to state security.
Security Breach Involving Prediction Market
A joint investigation conducted by Israeli police, military intelligence, and other security agencies led to the arrests and subsequent prosecution of the two suspects. The Attorney General's Office decided to press charges, which include bribery and obstruction of justice, following the discovery of their activities.
The suspects allegedly used the U.S.-based prediction market Polymarket to place bets on upcoming military operations. The reservist, who had access to sensitive information, provided the classified details that informed these wagers. Authorities have not disclosed the identities, ranks, or specific positions of the individuals involved, citing ongoing legal proceedings.
Financial Gains and Security Risks
Reports from Israel's public broadcaster Kan indicate that the bets were placed in June, just prior to Israel's conflict with Iran, resulting in winnings of approximately $150,000. This financial incentive underscores the severe breach of trust and the potential for profit-driven espionage.
In their statement, the Israeli Ministry of Defense, Shin Bet domestic security service, and police emphasized that such actions represent a "real security risk" for both the military and the nation. They vowed to act decisively against anyone involved in the illegal use of classified information.
Legal and Market Implications
The accused will remain in custody until the conclusion of their legal proceedings, as confirmed by the Prosecutor's Office. This case highlights the growing intersection of national security and emerging financial technologies.
Prediction markets, which operate through event contracts with prices reflecting perceived probabilities, have seen a surge in popularity. However, their classification in the U.S. differs from traditional gambling, raising concerns about transparency and the risks associated with their use. While some traders achieve significant gains, many experience daily losses, illustrating the volatile nature of these platforms.
The Israeli military and security services have reiterated their commitment to preventing and prosecuting such activities, signaling a firm stance against the misuse of sensitive information for personal gain.
