How Prediction Markets Made Traders Rich Off Maduro

• U.S. traders made $630K betting on Maduro’s capture before it was publicly confirmed.
• Three new crypto wallets turned small bets into huge gains on prediction markets.
• Lawmakers plan rules to prevent insider profits on prediction market contracts.

U.S.-based traders made large profits this January after betting on the capture of Venezuelan President Nicolás Maduro on prediction market platforms. The wagers were placed before public confirmation of the event.

Several traders placed bets that Maduro would be captured or removed from power by late January. After authorities confirmed his detention, those contracts paid out, producing gains that in some cases reached hundreds of thousands of dollars. 

According to Lookonchain, three digital wallets accounted for a combined $630,484 in profits. One wallet turned roughly $34,000 into nearly $410,000, another converted $25,000 into about $145,600, and a third transformed $5,800 into $75,000.

Prediction markets allow users to trade contracts tied to real-world outcomes. Each contract settles at a fixed value if the event occurs and at zero if it does not. Prices fluctuate as traders buy and sell based on the market’s collective view of the likelihood of an outcome.

In the Maduro contracts, prices implied a low probability for much of the trading period. That changed rapidly in the days before the capture, when prices climbed sharply. Traders who entered early at lower prices realized the largest gains once the outcome was confirmed.

Information Flow and Market Debate

The timing of the bets raised eyebrows because prices surged before official confirmation. Lookonchain noted that all three wallets were created just days before the bets and had no prior trading history, suggesting an unusual pattern not typical of ordinary retail traders.

Some observers questioned whether traders had privileged insights rather than relying solely on publicly available information. While no evidence indicates any rules were broken, the situation highlighted concerns about unequal access to information.

In the U.S., prediction markets are regulated as commodities, not securities. Platforms say they prohibit trading on non-public information and monitor for manipulation, though rules are still evolving.

The episode also illustrated the role of crypto-based systems. Platforms like Polymarket use blockchain technology and stablecoins to settle trades across borders. While the markets themselves aren’t cryptocurrencies, they rely on digital asset technology.

New Bill for Insider Trading

Meanwhile, the profits from the bets on Maduro led U.S. lawmakers to propose stricter rules. Representative Ritchie Torres announced plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026, which aims to prevent federal officials and political appointees from profiting from prediction markets while holding nonpublic information. 

The bill would bar participation in contracts on platforms such as Polymarket and Kalshi, aligning with ethical safeguards under the STOCK Act.

Proponents of the legislation say the goal is to preserve market integrity and prevent the misuse of privileged information for personal gain, emphasizing that prediction markets should aggregate public insight rather than serve as avenues for exploiting insider access.

Related: U.S. Attacks Venezuela; Is Crypto the Only Financial Escape?