A WSJ report reveals that an anonymous Polymarket trader made ~$410,000 by betting on Maduro’s ouster by January 31, with the final wager placed minutes before U.S. strikes began. The account was brand-new, the bets were highly concentrated, and contracts were priced around 8 cents (implying 8% odds) when the trader went all-in.
Are prediction markets structurally vulnerable to insider trading when the underlying event involves classified government operations?
- The trader created an account in late December and ramped up bets over a week, focusing on Maduro being out by Jan. 31
- Final bet: 9:58 p.m. ET Friday, shortly before the operation launched
- Return: roughly 12x on $34,000 in wagers
- The U.S. operation was closely held among top advisers, involving 150 warplanes from 20 locations
Why Suspicions Arose
- New account with concentrated positions
- Heavy sizing at extremely low odds right before the event
- Little public information suggesting imminent action
- Pattern mirrors previous suspected insider cases on Polymarket (e.g., “Google insider” trader)
Traditional securities markets have routine insider-trading monitoring. Prediction markets have fewer safeguards, and Polymarket’s ban on U.S. users is easily bypassed via VPNs. A former prosecutor noted that while U.S. officials could face prosecution under existing swap-contract laws, foreign traders abroad may fall outside U.S. jurisdiction.
Rep. Ritchie Torres plans to introduce legislation barring federal officials from betting on prediction markets where they have relevant nonpublic information.
Platform Defense
Polymarket CEO Shayne Coplan argues that community self-regulation works—traders spot suspected insiders in real-time and flag them publicly. Internal audits have typically found traders obtained information through legal means like website scraping rather than true inside knowledge.p
This isn’t definitively proven insider trading. It's about whether the incentive structure and enforcement mechanisms make prediction markets on classified operations both attractive to insiders and difficult to police. The question is whether information asymmetry and certain event types are fundamentally too insider-prone to list.