The prediction markets like Polymarket or Kalshi They operate in a legal gray zone that allows betting on coups d’état and military interventions with insider information.
A market without sheriff. The capture of Maduro has brought to the table the great problem of prediction markets: there is no mechanism to prevent insider information trafficking.
On traditional stock exchanges this is a crime that is severely prosecuted, but these types of platforms operate in a regulatory limbo where betting with privileged or classified information is not punished, and in fact it is assumed to be part of the business model.
- The account that won more than $400,000 He invested 30,000 when the odds were around 6%. That movement occurred on Friday night, hours before Saturday’s operation. He timing Perfect is not a coincidence: it is the signature of someone who knows what is going to happen.
Between the lines. The disturbing thing is not that someone has enriched themselves with classified information. It’s perfectly legal. Joe Pompliano, investor and podcaster, summed it up in X: “He insider trading “It’s not just allowed in prediction markets, it’s incentivized.”
A perfect ecosystem has been created there to monetize confidential information without leaving a trace:
- Anonymity through Blockchain.
- Absence of identification requirements.
- Cryptocurrency transactions.
The threat. The Maduro case opens up disturbing scenarios:
- What happens when a Pentagon adviser can make hundreds of thousands of dollars betting on military operations he himself plans?
- Or when a congressman gets rich anticipating legislation that he is going to promote?
In traditional financial markets, the answer begins with ‘c’ and ends with ‘arcel’. At Polymarket this is just another day at the office and is even encouraged by the design of the system itself.
Yes, but. Democratic Representative Ritchie Torres has announced a law to prohibit elected officials from participating in these markets. It’s a first step, for now nothing more than that. The elephant in the room is whether a society can allow markets where betting on coups or military interventions is carried out without any oversight.
For years, these markets were niche. And when they got the 2024 presidential election right better than all the polls, They gained credibility (and attention) at once. Now the Maduro case shows that this newly gained prestige is based on a model that rewards having privileged information and allows speculation with life or death decisions without any limits.
At stake. If prediction markets consolidate themselves as reliable thermometers of geopolitical events, and at the same time allow those who make these decisions to profit by betting on them, conflict of interest will be routine.
The account that bet on Maduro has not bet on anything again at the moment, but the problem remains: as long as these markets operate without supervision, each international crisis will also be a business opportunity for whoever has the appropriate information. And that has consequences that go far beyond winning or losing money:
- An official could delay a diplomatic intervention so that his bet matures.
- A military advisor could push to advance an operation to get paid sooner.
When geopolitical decisions are also opportunities for personal speculation, incentives are no longer aligned with the public interest.
Featured image | Polymarket, Xataka with Mockuuups Studio
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