A US Special Forces soldier has been arrested by federal authorities after allegedly making more than $400,000 (£297,160) in profits from prediction market bets on Polymarket linked to the removal of Venezuelan President Nicolás Maduro, according to sources familiar with the case.
Prosecutors are investigating whether the trades were based on classified information from a covert military operation, marking what officials describe as a rare insider trading-style case involving a prediction market platform.
Arrest Linked to Classified Military Operation
Federal investigators say the soldier, a member of US Special Forces, was directly involved in a classified operation that led to the capture of Nicolás Maduro and his wife during a US-backed mission in January 2026.
According to the sources, the operation formed part of a wider mission referred to as Operation Absolute Resolve, which was carried out overnight with the involvement of US law enforcement and military personnel.
Authorities allege that shortly before the public announcement of Maduro's capture, the soldier placed a series of bets on Polymarket predicting the Venezuelan leader's removal from office and the possibility of US military action in Venezuela.
$33,000 Stake Turned Into $400,000 Profit on Polymarket
Investigators believe the soldier opened a Polymarket account in December 2025 and placed approximately $33,933 (£25,208) across multiple prediction contracts related to geopolitical events in Venezuela, according to ABC News, citing sources familiar with the investigation.
The most significant wager, a $32,537 (£24,171) bet that Maduro would be out of office by 31 January 2026, reportedly returned a profit of more than $400,000 (£297,160) after the outcome was resolved following Maduro's capture.
Other positions included bets on whether the United States would carry out military action in Venezuela. The trades have drawn scrutiny due to their timing, which occurred just hours before the official announcement of the operation's outcome.
DOJ Investigates Possible Insider Trading
The US Department of Justice has launched an investigation into whether the soldier used non-public government information to place the trades, potentially violating federal laws governing misuse of confidential information.
While prediction markets like Polymarket are primarily regulated by the Commodity Futures Trading Commission, prosecutors are reportedly examining whether existing statutes, including provisions of the Commodity Exchange Act, can be applied to cases involving government employees.
Legal officials are also considering whether the activity could fall under broader fraud statutes if classified operational details were used to gain financial advantage.
A Justice Department spokesperson declined to comment on the ongoing investigation.
Scrutiny Grows Over Polymarket and Geopolitical Betting
Polymarket, one of the largest prediction platforms globally, allows users to trade contracts based on yes-or-no outcomes of real-world events, including political and military developments.
The platform has faced increasing scrutiny in recent years over the possibility of insider trading and the use of confidential information to influence betting outcomes. In this case, investigators are focusing on whether the soldier's access to sensitive operational intelligence gave him an unfair advantage over other market participants.
Company representatives have not publicly commented on the case, though sources indicate the platform has previously cooperated with regulatory inquiries into unusual trading activity.
Legal Implications and Regulatory Challenges
The arrest is believed to be one of the first instances in the United States where federal prosecutors have pursued insider trading-style allegations involving prediction markets.
Legal experts say the case could set an important precedent for how traditional financial crime laws are applied to emerging digital markets that operate outside conventional stock and commodities exchanges.
US Attorney for the Southern District of New York, Jay Clayton, has previously stated that prosecutors are exploring legal tools that could address misuse of prediction markets, including frameworks similar to insider trading regulations used in securities law.
Authorities are now working to determine whether the soldier's actions represent an isolated case or part of a wider vulnerability in how sensitive government information may intersect with online prediction trading platforms.
