A suspected insider’s ‘Maduro trade’ and Iran’s new bet on Polymarket fuel fears of ‘information laundering’ and lead to a bill to ban US officials from trading.
Summary
- An anonymous trader’s big win over Venezuela’s Maduro and the high stakes on Iran show how large positions on Polymarket can fuel sensitive geopolitical events.
- Analysts warn of ‘information laundering’, where coordinated bets influence odds, trigger bots and headlines and masquerade as real-time information for markets and policymakers.
- Rep. Ritchie Torres’ Public Integrity in Financial Prediction Markets Act would ban U.S. officials from trading on non-public information as regulators monitor these gray zone markets.
Polymarket, a blockchain-based prediction marketplace platform, is facing increasing criticism over allegations of insider trading and concerns that the platform could be used to manipulate information and influence public sentiment depending on recent market activity and regulatory developments.
Polymarkt under fire due to controversial ‘Maduro trade’
The controversy centers on what market observers have dubbed the “Maduro trade.” Earlier this month, an anonymous wallet generated significant profits after betting on Venezuelan’s removal President Nicolas Maduro hours before US special forces captured him, according to blockchain transaction data.
President Donald Trump publicly stated that a Venezuelan whistleblower involved in the operation had been arrested, adding a political dimension to the case.
Data from Lookonchain, a blockchain analytics service, indicated that two of the three wallets linked to these gains remained inactive for 11 days, prompting speculation about possible law enforcement or exchange involvement. According to the data, a third wallet is active again.
The active wallet placed a bet two days ago predicting that Iran’s Supreme Leader Ayatollah Ali Khamenei will lose power on January 31 as domestic protests continue in Iran. According to data from Polymarket, the market remains open and under observation.
Additional suspicious activity arose this week when another big wallet invested heavily in the possibility of a US attack on Iran on January 14. During the escalation of protests and the temporary closure of Iranian airspace, opportunities on Polymarket increased sharply and trading volume increased, platform data shows.
The attack did not occur and the market closed with a “No” result, eliminating the trader’s position. However, according to market analysts, the trading activity generated significant attention in global markets.
Analysts have identified what they describe as “information laundering,” a high-stakes tactic designed to shift market opportunities. Trading bots and social media platforms amplify these moves, presenting them as real-time intelligence signals that can influence geopolitical narratives, public opinion and diplomatic decisions, market observers say.
Polymarket data is widely shared on platforms such as X, formerly known as Twitter, and Telegram. A coordinated bet could generate news coverage and influence traditional financial markets before there are official confirmations, analysts said.
The controversy has reached Washington. Congressman Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act of 2026, legislation intended to prohibit U.S. government officials from trading in markets related to government actions when they have non-public information.
The bill has dozens of co-sponsors in the House of Representatives, but has not yet been voted on and lacks a counterpart in the Senate, according to congressional data. No conclusive evidence has emerged linking Iran trading to US government insiders, although the pattern of sudden bets and reversals has raised concerns about prediction markets operating in regulatory gray areas.
The controversy highlights concerns about how betting activity on prediction platforms could influence public perception of future events, potentially transforming decentralized finance platforms into tools that shape geopolitical narratives, regulatory experts and market analysts said.
