 "How a trader made $410,000 betting on US capture of Nicolás Maduro")
An unidentified crypto trader made more than $400,000 after placing bets that Venezuelan President Nicolás Maduro would be removed from office, shortly before the United States (US) announced its action against him, according to news agency Reuters.
Profitable bets placed ahead of announcement
The trader wagered that Maduro would be out of power by the end of January on the crypto-based prediction platform Polymarket.
Shortly after the bets were made on Saturday, US President Donald Trump announced that Maduro had been taken into custody following a US operation.
Odds shifted sharply before Trump’s statement
Polymarket data showed that the probability of Maduro’s exit stood at just 6.5 per cent on the afternoon of Friday, January 2.
The odds rose to about 11 per cent shortly before midnight and surged further in the early hours of January 3.
The data further showed a sudden change in trading positions shortly before Trump posted on Truth Social that Maduro was in US custody.
Single account made large gains
The anonymous account in question, created only last month, placed four positions linked to Venezuela and reportedly earned more than $436,000 from a total stake of $32,537.
The account carried only a blockchain identifier made up of letters and numbers, and the identity of the trader remained unknown.
A handful of other Polymarket users also made tens of thousands of dollars from similar wagers tied to Maduro’s capture.
Insider trading concerns raised
Dennis Kelleher, chief executive of Better Markets, a non-partisan financial reform group, told CBS News that the trade appears suspicious.
“This particular bet has all the hallmarks of a trade based on inside information,” he said.
Lawmakers moved to tighten rules
The mystery trade drew attention from US lawmakers already pushing for tougher insider trading rules.
Congressman Ritchie Torres, a Democrat from New York, introduced a bill on Monday that sought to bar government employees from trading on prediction markets if they possessed “material non-public information” linked to a wager.
Prediction markets under scrutiny
Prediction markets allowed users to trade yes-or-no contracts on real-world outcomes, which ranged from politics to sports and the economy.
The sector attracted hundreds of millions of dollars in wagers during the 2024 US presidential election.
While insider trading was illegal in stock markets, prediction markets operated under fewer restrictions.
Polymarket received approval from the US Commodity Futures Trading Commission in September to relaunch US operations after acquiring QCEX, a licensed derivatives exchange, for $112 million. However, users in the US cannot access Polymarket’s main platform.