A Polymarket trader turned $30,000 into $436,000 by betting on President Maduro's capture days before it happened, sparking debate over whether prediction markets incentivise insider trading on military conflicts.
The blockchain-based prediction platform Polymarket has once again tested the ethical boundaries of event-based trading by hosting active markets on the military conflict and political collapse in Venezuela. As tensions escalated leading up to the recent US military operation, users poured millions of dollars into contracts speculating on the fate of President Nicolás Maduro.
Trading volumes on markets tied to US military engagement and Maduro’s exit ranged from approximately $926,000 to nearly $3 million. This massive liquidity highlights how prediction markets are increasingly serving as real-time sentiment gauges for geopolitical crises, often moving faster than traditional news outlets.
While markets predicting a full-scale "invasion" remained low (2% to 9%), contracts related to specific military engagements traded at near-certainty just hours before official confirmations, reflecting strong conviction among traders.
Scrutiny has intensified following revelations that a mysterious trader netted a massive windfall by predicting Maduro’s capture with suspicious precision.
In late December 2025, a newly created account placed over $30,000 in bets that Maduro would be out of office by 31 January 2026. At the time of the wager, the implied probability on Polymarket was as low as 5.5% (compared to roughly 7% on rival platform Kalshi).
When US forces seized Maduro and his wife from their residence this past Saturday, the value of those contracts skyrocketed. The trader cashed out $436,759.61, securing a profit exceeding $400,000-a return of more than 1,200% in less than a week.
The suspicious timing has fuelled a fierce debate about information asymmetry. The wallet in question was created less than a week before the operation and traded exclusively on markets related to Maduro’s removal and US military action.
Entrepreneur and investor Joe Pompliano commented on the situation, stating on social media that "insider trading is not only allowed on prediction markets; it’s encouraged."
Unlike traditional financial markets where trading on non-public material information is a crime, prediction markets theoretically rely on "insiders" to correct prices and reflect the true probability of an event. However, this creates an uncomfortable reality where individuals with potential prior knowledge of military operations can profit directly from that intelligence.
The Venezuela incident brings the industry dangerously close to the concept of "assassination markets"-a theoretical crypto-anarchist idea where betting on a leader's death incentivises the act itself. While there is no evidence this trader influenced the event, they certainly profited from specific, likely non-public, foreknowledge.
This exposes the dual nature of prediction markets. On one hand, they are the ultimate "truth machine." The fact that odds shifted before the news broke proves the market functioned correctly by signalling a high-probability event. On the other hand, it monetises conflict in a way that regulators find deeply unsettling.
If US military personnel or intelligence officers are using Polymarket to monetize their classified knowledge, it poses a severe national security risk. While the CFTC battles Kalshi over election integrity, this "war profit" scenario is arguably the bigger regulatory target. Expect the Department of Defence and US intelligence agencies to take a much closer look at who exactly is on the other side of these trades.
