Insider trading: A mystery trader made $400,000 betting on Maduro’s downfall
The Wall Street Journal reports:
Less than five hours before nighttime explosions rocked the Venezuelan capital of Caracas, an unknown trader doubled down on bets that Nicolás Maduro would soon be out as the country’s leader.
The wagers on Polymarket, a popular crypto-based betting platform, netted the trader more than $400,000, a 12-fold return on investment—and fueled suspicions that someone used inside knowledge of the closely held U.S. operation to make a quick profit.
Insider trading is illegal in the stock market, and regulators routinely monitor suspicious trades ahead of big corporate news so they can prosecute insiders who attempt to enrich themselves using nonpublic information.
There are fewer safeguards in place to prevent people from exploiting their inside knowledge on Polymarket. The site allows users to bet on a variety of future events, ranging from President Trump’s political appointments to this year’s World Cup to which characters would die in the recent season of “Stranger Things.”
The anonymous user created an account last month and placed an initial bet on Dec. 27, buying $96 worth of contracts that would pay off if the U.S. invaded Venezuela by Jan. 31, Polymarket data shows. The person ramped up bets over the next week, sticking to a handful of similar contracts, as tensions mounted between Washington and Caracas.
The trader focused bets on contracts that would pay out if Maduro would no longer be Venezuela’s leader by Jan. 31, when that still seemed like a long shot.
The trader’s final bet came at 9:58 p.m. ET on Friday, shortly before President Trump ordered the military to move forward. Such contracts were priced at just 8 cents apiece, implying that Polymarket users saw only an 8% probability of the Venezuelan strongman losing power this month, the platform’s data shows.
Several hours later, news broke of the U.S. operation to capture Maduro and the contracts shot up in value. In the end, the trader earned nearly $410,000 in profit on about $34,000 worth of wagers. More than half the value of the total wager was placed the evening before the attack. [Continue reading…]