Alex Goldenberg

Prediction markets work great for a lot of things, election forecasting, technology launches, corporate earnings.

But when you apply them to military operations, you can create risks that are fundamentally different.

That's what got me writing about this.

We now have, we'll get into more detail on this, I hope, Ukrainian volunteers, Russian military bloggers, and potentially American security clearance holders

now converting potentially insider knowledge of military operations into profit through anonymous crypto wallets.

This isn't theoretical anymore.

As you mentioned, 2 a.m.

local time on January 3rd, U.S.

forces captured President Nicolas Maduro in an incredibly complex and dangerous attack, now known as Operation Absolute Resolve.

But hours earlier,

a newly created PolyMarket account, had invested $30,000 betting on Maduro's exit.

And by that morning, that position had netted roughly $400,000 in profit, which is a 1200% return in less than 24 hours on a military operation.

And the timing suggests that the trader had advanced knowledge of this military operation.

And this isn't the first time.

In October, someone placed a $68,000 bet on the Nobel Peace Prize winner hours before the announcement.

And while prediction markets theoretically prohibit insider trading, their design creates powerful incentives to monetize non-public information.

And the platforms themselves often lack effective enforcement mechanisms, especially those that operate through pseudonymous crypto wallets like PolyMarket, for example.

We likely will never know if the person who made $400,000 on the Maduro operation held a security clearance.

So in November, someone manipulated the frontline map that Polymarket uses to settle Ukrainian territorial bets.

They fabricated Russian advance time precisely to trigger payouts and then erase the evidence after the settlement.