Investor makes fortune betting on Maduro's capture: Insider trading involved?
What's the story
Just before the US military attacked Venezuela and captured President Nicolas Maduro, a new account on Polymarket made some highly questionable investments. The prediction market had been taking bets on whether or when Maduro would be ousted from power, with prices for "out by January 31, 2026" as low as $0.07 late Friday evening. But within 24 hours of the military action, this newly created account invested tens of thousands of dollars and racked up several hundred thousand in profits.
Investment
New account's investment and profit
The new account, created less than a week ago, invested over $30,000 just before the assault. This strategic move paid off handsomely as it turned a profit of over $408,000. The sudden spike in activity on Polymarket has led to widespread speculation on social media platforms about possible insider trading by the bet placer who may have even worked at the Pentagon.
Market concerns
Prediction markets and insider trading
Joe Pompliano, an investor and podcaster, quickly highlighted on X that "insider trading is not only allowed on prediction markets; it's encouraged." Despite previous cases of apparent insider trading on these platforms, companies have shown little interest in curbing such practices. They argue that their value lies not in providing a level playing field for investors but in delivering news and insights.
Company response
Kalshi's stance on insider trading
When approached for comment, Kalshi, another prediction market, referred to a post on X stating that such insider trading was against its rules. However, Polymarket has yet to respond to similar inquiries. The lack of response from Polymarket leaves room for speculation about its stance on this controversial practice in prediction markets.