A gambler reportedly netted nearly half a million dollars wagering on the capture of Venezuela’s president just prior to its official announcement, prompting questions about potential exploitation of inside knowledge related to the U.S. operation.
On Polymarket, a cryptocurrency-powered prediction platform, bets anticipating Nicolás Maduro’s removal from power by the end of January surged in the hours leading up to President Donald Trump’s Saturday announcement that the Venezuelan leader had been apprehended.
One account, newly created last month and focused exclusively on Venezuelan affairs, allegedly amassed over $436,000 (£322,000) from a $32,537 investment across four positions.
The identity of the individual behind the wager remains unclear, with the anonymous account identified only by a blockchain identifier.
Polymarket data indicates traders initially assessed the likelihood of Maduro’s exit at a mere 6.5% on Friday, January 2nd.
However, those odds jumped to 11% shortly before midnight, escalating further in the early hours of January 3rd, suggesting a sudden shift in market sentiment immediately before Trump’s Truth Social post regarding Maduro’s custody.
Polymarket has not yet responded to requests for comment.
Dennis Kelleher, chief executive of Better Markets, a non-partisan advocacy group for financial reform, told CBS, the BBC’s U.S. partner, that “This particular bet has all the hallmarks of a trade based on inside information.”
Several other Polymarket users also reportedly profited handsomely, earning tens of thousands of dollars from wagers anticipating Maduro’s capture.
Lawmakers are beginning to take notice of these activities.
Congressman Ritchie Torres, a Democrat from New York, introduced a bill on Monday seeking to prohibit government employees from trading on prediction markets if they possess “material nonpublic information” pertaining to a particular bet.
Prediction markets have experienced a surge in popularity in the U.S. in recent years, with platforms like Polymarket and Kalshi enabling users to wager on a diverse range of events, from sports to political outcomes.
The industry’s leading companies attracted hundreds of millions of dollars in wagers on the outcome of the 2024 U.S. presidential election.
The industry faced regulatory scrutiny under the Biden administration, but has received a more favorable reception during the Trump presidency.
Donald Trump Jr., the president’s son, serves in advisory roles at both Kalshi and Polymarket.
While insider trading is illegal in the stock market, prediction markets currently operate with fewer regulations.
A spokesperson for Kalshi stated that the prediction site “explicitly prohibits insider trading of any form, including government employees trading on prediction markets related to government activity.”
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