After Maduro was captured, someone made $400,000 on Polymarket : NPR

For one forecast market trader, the Trump administration's weekend grab The fee of Venezuelan leader Nicolas Maduro was almost half a million dollars.

On Polymarket, a popular site for betting on the outcome of real events, the user placed a bet $32,000 that Maduro would be overthrown by the end of January, hours before Trump ordered the operation. When it became clear that the US had captured Maduro, the trader made more than $400,000 in profit.

Was the trader just lucky or was he involved in secret government discussions? It's impossible to say yet.

Internet sleuths tried to identify the dealer without success. checkwhich originally went by the name “Burdensome-Mix” before changing its display name to a string of letters and numbers, joined Polymarket just weeks before the deal with Maduro was struck.

Most traders on prediction markets for example, Polymarket and Kalshi place bets under pseudonyms rather than under real names. However, if accounts are linked to cryptocurrency wallets, it can sometimes be possible to expose the user.

Chainaanalysis, a company that tracks cryptocurrency theft, told NPR it could not identify the person behind the account, but noted that they use several US cryptocurrency exchanges for cash-outs, suggesting they are not trying to hide their identities by routing money through shady foreign exchanges, which is typical in crypto fraud schemes.

“Was this insider trading? It’s hard to say,” said Daniel Taylor, a professor at the Wharton School of the University of Pennsylvania who studies insider trading and corporate fraud. “In hindsight, it’s easier to spot things that look suspicious than to spot them in real time.”

In the case of the man who made a lucrative bet on Maduro, the mystery continues to rage, but it has sparked debate about the possibility of insider trading in prediction markets, where financial experts say abuses can go undetected by federal regulators.

Unlike the stock market, where the Securities and Exchange Commission monitors market activity for potential insider trading, there are far fewer barriers to keeping prediction markets in check.

Polymarket and its competitor Kalshi are regulated by the Commodity Futures Trading Commission. Agency can enforce rules against fraud, including cases of insider trading. But the agency has about one-eighth of the SEC's staff, despite Kalshi alone. receiving trading volume of over $2 billion in one week.

The president's son, Donald Trump Jr., is an adviser to both sides. Polymarket And Kalshileading some experts to be skeptical that the agency would ever crack down too harshly on companies.

“Given the contentious relationships in the first family,” said Yale School of Management professor Jeffrey Sonnenfeld, “CFTC oversight may be at risk.”

Yash Kanoria, a professor at Columbia Business School, agreed that the companies' ties to the Trump administration undermine confidence that regulators will aggressively police platforms for traders seeking to rig bets.

“We need them to be invested in rooting out bad activities like insider trading without any distractions,” he said.

The CFTC and Polymarket did not respond to requests for comment.

Kalshi said in a statement that the platform prohibits insider traders, “including government officials, from trading in government-related forecast markets.” Likewise, Polymarket rules generally prohibit market manipulation.

The Biden administration has cracked down on prediction markets, fighting them in court to allow betting on US elections and opposing sports betting, which is banned in nearly 20 states.

Trump's regulators are taking the opposite approach. The DOJ and CFTC have dropped their investigations into prediction markets. Trump's own social network TruthSocial published announced plans to introduce its own forecast market.

There have been other cases of potential insider trading at Polymarket, such as when someone scored nearly $1 million if you bet correctly on what 22 of Google's 23 most popular searches last year would be.

Taylor, of the University of Pennsylvania, says that even if it can be proven that someone used proprietary information to make money in the prediction market, a successful prosecution will depend on showing harm.

“How will the US government suffer if someone uses the early warning of Maduro’s operation?” – he said. “Unless you can prove that you are depriving someone of value, it will be a very difficult case.”

Do you have information to share about the Maduro deal or insider trading in the prediction markets? Bobby Allyn can be reached through the encrypted messaging app Signal at ballyn.77.