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High-stakes wager pays off before official disclosure
An unidentified trader on the crypto-based prediction platform Polymarket turned a $32,537 bet into $436,000 by correctly wagering that Venezuelan President Nicolás Maduro would be out of power by January 31. The trades occurred hours before US President Donald Trump revealed Maduro's capture on Saturday.
Timing raises insider trading suspicions
The anonymous account, created last month, placed four separate bets-all focused on Venezuela. Polymarket data shows the odds of Maduro's removal jumped from 6.5% on the afternoon of January 2 to 11% by midnight, then surged in the early hours of January 3. The spike coincided with Trump's Truth Social post announcing Maduro's detention.
Dennis Kelleher, CEO of financial reform advocacy group Better Markets, told CBS, a BBC partner, that the bet "has all the hallmarks of a trade based on inside information."
Regulatory gaps in prediction markets
While insider trading is illegal in traditional stock markets, prediction markets like Polymarket operate with fewer restrictions. The platform, which allows bets on political events, sports, and other outcomes, did not respond to requests for comment.
A handful of other users also profited tens of thousands of dollars from Maduro-related wagers. The incident has drawn attention from lawmakers, including New York Democrat Ritchie Torres, who introduced a bill on Monday to ban government employees from trading on prediction markets if they possess "material nonpublic information."
Industry growth and political ties
Prediction markets have gained traction in the US, with platforms like Polymarket and Kalshi attracting hundreds of millions in bets during the 2024 presidential election. The sector faced regulatory scrutiny under the Biden administration but has seen friendlier policies during Trump's presidency.
Donald Trump Jr. holds advisory roles at both Kalshi and Polymarket. A Kalshi spokesperson stated the platform "explicitly prohibits insider trading of any form, including government employees trading on prediction markets related to government activity."
Unanswered questions
The identity of the trader remains unknown, with the account linked only to a blockchain identifier. The lack of transparency in crypto-based prediction markets has fueled concerns about potential exploitation of nonpublic information.
