This is a serious news story that should be concerning to all sides, including people who are generally pro-markets. Thus, I wish that we had produced a top comment that was critical of Polymarket without being deranged. (Libertine? Adam Smith for totally unfettered markets? Satanic?)

If the prediction markets cannot produce a satisfactory solution to this problem, then their license to operate should be seriously cut back by regulators. Bets on a vast set of propositions that involve journalistic judgement should be banned, if they can't be blackmail-proofed. The social utility of these markets as info aggregators is marginal at best, and it is dwarfed by the harm of threats to reporters.

It is in Polymarket's court to figure out how to resolve this amicably. Hand over the names of the large bettors on that side of the market to the Israeli police. If your KYC has neglected to gather that info, then freeze all money on that side of the market until each bettor has identified themselves. Or some other means of fixing it, I don't know. Figure it out.

If Polymarket (and its competitors) cannot fix this, then it's time to get tough. Maybe it's time to actually crack down on Americans using VPNs. And if it comes down to it, I'm pretty sure that Shayne spends most of his time in the US, and we have extradition with Israel.