The very first user on Polymarket, a crypto-powered prediction market platform, has reportedly cashed in an amazing $436,000 from a bet. Their bet was on the expected collapse of Venezuelan President Nicolás Maduro. This astounding return is on the order of an original investment of $32,537 that you made in the platform. It allows users to predict just about anything, even future political developments.
Since then, Polymarket has seen a ream of increased interest, especially during the Trump presidency, which brought record users to the platform. Donald Trump Jr. sits in an advisory board position at Polymarket, emphasizing the platform’s ties to big name political figures. Over the past few months, users have earned thousands of dollars by betting on major events happening in Venezuela. They’re particularly concerned about the political fate of Maduro.
Just a few weeks ago, on January 2, Polymarket data showed that traders estimated the chances of Maduro leaving office at just 6.5%. A few minutes before midnight the same day, those odds skyrocketed to 11%. This unexpected spike means that traders have flipped their sentiment overnight. This strategic pivot dovetails neatly with Trump’s recent call on Truth Social for regime change in Venezuela. With the timing, that creates concern about what impact insider information will have on betting behavior.
“This particular bet has all the hallmarks of a trade based on inside information.” – Dennis Kelleher, CEO of Better Markets
The extreme volatility in betting lines makes more apparent a larger narrative playing out across the prediction market space. Polymarket’s other competitors, like Kalshi, have made waves lately. Users have bet hundreds of millions of dollars on events connected to the upcoming 2024 U.S. presidential election. This growth has certainly not escaped the notice of EPA or the Feds. Under the Biden administration, prediction markets were targeted for significant scrutiny. Torres’s response to the scandal was to have the brilliant Congressman Ritchie Torres introduce legislation to prevent government employees from trading if they possess “material nonpublic information.”
Polymarket is yet to return requests for comment about these developments, and their continued regulatory headwinds. A spokesperson for Kalshi emphasized their commitment to ethical trading practices: “We explicitly prohibit insider trading of any form, including government employees trading on prediction markets related to government activity.”