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The Secret History of Polymarket – Part 1
By Whitney Webb & Mark Goodwin | June 30, 2026
Shayne Coplan, now the world's youngest "self-made" billionaire, is the public face of what purports to be the world's largest crypto-powered prediction market – Polymarket. Coplan and his alleged arch-rival, Tarek Mansour of the competing prediction market platform Kalshi, recently buried the hatchet to create a new venture capital firm called 5c(c) Capital, a reference to the section of the Commodity Exchange Act which is currently used to regulate prediction markets. The fund is aimed at bulking up the infrastructure for what has rapidly become an insurgent digital industry.
Since the early days of Donald Trump's 2nd term, prediction markets like Polymarket and Kalshi have largely been told to police themselves. This comes courtesy of the current head of the (CFTC), Michael Selig, who was previously a lawyer representing major cryptocurrency industry clients. Selig became the CFTC chair only after the Trump administration rescinded the nomination of Brain Quintenz, who then sat on Kalshi's board and worked for the crypto venture team at Marc Andreessen's firm Andreessen Horowitz. Andreessen Horowitz has notably backed Coplan's new prediction market VC firm 5c(c) Capital and is also heavily invested in Kalshi.
During the past couple of years, Polymarket and Kalshi have become important components of reporting on global finance and politics. This is partially due to their extensive cultivation of wide-ranging media partnerships. For instance, in the case of Polymarket, the company now boast partnerships with the Wall Street Journal and its parent company Dow Jones, as well as Yahoo! Finance, Substack and the live-streaming platform Parti. While these partnerships have been framed as an effort to further legitimize prediction markets, concerns have been raised that these media partnerships could be used to intentionally manipulate these very markets via the implantation of false and misleading stories. [Editor's note: Even though safeguards have been built in the likelihood of these people using AI and other scams to rig or falsify markets through planted news stories for futures contracts is very high.]
Concerns like these have dogged these new prediction markets just as their star has risen. Insider trading allegations, including from the platforms themselves, have shown how prediction markets can be abused by traders with insider access to market movers and policy makers. Now with Congress trying to get involved, both Polymarket and Kalshi have announced new efforts to work to improve "market integrity" without the need for government intervention. However, the effects of their efforts remain to be seen, as several of the new measures are based on traders self-reporting their conflicts of interests.
Concerns about widespread insider trading have only been exacerbated by both the White House's open dismissal of those concerns as well as the Trump family's close ties to both Polymarket and Kalshi. For instance, Trump's son, Donald Trump Jr., is both a strategic advisor to Kalshi and also advises Polymarket. Trump Jr. is also a major investor in Polymarket via his venture capital firm 1789 Capital. The evidence of insider trading on these platforms, particularly in cases where it is directly related to Trump's "most consequential decisions," is now widely acknowledged by mainstream media.
While the ascendance, and arguably the normalization, of insider trading are being treated as unintended "flukes" of these markets, there is an argument to be made that they are operating just as intended. Some of the evidence for that argument can be found in what appears to be Polymarket's true origins.
Despite being nominally founded in 2020, Coplan –– in founding his company –– was admittedly following the model of the Big Tech billionaires he had admired as a teen, particularly those who created their flagship companies by rebranding and privatizing controversial military programs from the George W. Bush era for maximum profit and, seemingly, to advance even darker ambitions.
Previous reports from Unlimited Hangout have explored how Mark Zuckerberg's Facebook gave new life to the Pentagon's LifeLog program the day it was shut down and how Peter Thiel's Palantir was created as a privatized version of the Pentagon's surveillance dragnet program Total Information Awareness. In this two-part series, we now examine how Shayne Coplan appears to have rebranded and privatized yet another failed Pentagon program from that same era.
By following in the footsteps of his admitted idol, Zuckerberg, and backed by funding from Thiel-linked sources, Coplan has managed to resurrect the Policy Analysis Market (PAM), one of the most controversial Pentagon programs from its now defunct Information Awareness Office (IAO). Tellingly, his efforts to launch Polymarket included direct communication with one of the main architects of the PAM program and he was also greatly influenced by another apparent Thiel-linked effort to resurrect PAM that failed.
Importantly, Coplan's apparent re-brand of PAM –– often referred to in the past as the "Terrorism Futures Market" ––is about more than just reaping mega-profits in an era where insider trading and financial corruption are flourishing with the White House's blessing. As will be explored in Part II of this series, an ulterior motive directly linked to Coplan's efforts aims to advance an extremely dystopian governance model that is of great interest to the Big Tech billionaires now closely linked to Coplan and the dominant prediction market companies, such as Peter Thiel and Marc Andreessen.
A Brief History of American Prediction Markets
The story of prediction markets began in the late 1980s, when a handful of professors teaching at the University of Iowa created what they initially called the Iowa Political Stock Market. As part of their market experiment, university staff and students were recruited to trade contracts on the 1988 U.S. presidential election between George H.W. Bush and his Democratic challenger Michael Dukakis. It quickly became a popular phenomenon in the finance and accounting departments of the University of Iowa, and later expanded far beyond its halls. Under the name of the Iowa Electronics Market or IEM, it soon became open to anyone who wanted to open an account, so long as they completed a one-page application and sent the market operators a check in the mail. By the time the next presidential election took place in 1992, the IEM had received an exemption from the Commodity Futures Trading Commission (CFTC), allowing it to operate without regulation so long as it was run for "solely academic and experimental purposes," did not use outside advertising, and individual traders were prohibited from investing more than $500.
The premise of the experiment that later became the IEM was that, while voters have no incentive to be honest with pollsters, they would respond to information differently if their own money was on the line. "There is a strong incentive for players in these political markets to process information about the candidates and their conclusions are revealed to us through the markets' prices," the Wall Street Journal quoted Steven Feinstein, then an assistant professor of finance at Boston University's School of Management, as saying. The Wall Street Journal, writing on the IEM in 1995, also noted that one of the ways in which the IEM was particularly useful was because "shareholders can react quickly to developments." The article also quotes Sheryl Ball, formerly an assistant professor of economics at Virginia Polytechnic Institute and State University, as saying "by watching the political stock market it is possible to gauge the effect of an ad, a policy announcement or an alleged affair on the part of a candidate almost instantaneously." The idea of using prediction markets as an important indicator of how the public will react to a given piece of information would later serve as a foundational concept for "futarchy" – to be discussed in detail in Part II – which proposes using prediction markets as a new system of public governance.
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More than $1.4 billion in total trading volume has been staked on prediction markets for the 2026 U.S. midterm elections. Analysts and market observers project total volume could reach or exceed $2 billion by the time polls close on Election Day:
Do people realize the amounts of money involved? Trading volume on National Fixed League (NFL) entertainment football games across regulated prediction markets is projected to reach $36.8 billion for the 2026–2027 season. Both Kalshi and Polymarket offer markets on NFL games, but how they operate, and how they are viewed legally, differs significantly from traditional sports betting:
NFL Betting On Track For Another Record, But Prediction Markets Steal Spotlight
NFL Betting On Track For Another Record, But Prediction Markets Steal Spotlight
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