Polymarket — the blockchain prediction-market platform — is under fresh scrutiny after a string of high‑stakes bets has prompted accusations of insider trading and raised alarms that prediction markets could be used to shape geopolitical narratives. What happened - The controversy centers on the so‑called “Maduro trade.” Earlier this month an anonymous wallet on Polymarket reportedly made large profits after betting that Venezuelan President Nicolás Maduro would be removed — hours before U.S. special forces captured him, according to blockchain transaction records. President Donald Trump also said a Venezuelan whistleblower linked to the operation had been arrested, adding a political dimension to the episode. - Blockchain analytics firm Lookonchain flagged the wallets involved: two of three wallets tied to the profits were inactive for 11 days, fuelling speculation about possible law‑enforcement or exchange intervention, while a third wallet later resumed activity. - That active wallet recently placed another headline‑grabbing bet, predicting Iran’s Supreme Leader Ayatollah Ali Khamenei would lose power by Jan. 31 as domestic protests continued. That market remains open and under observation. - Separately, another large wallet heavily backed a Polymarket question on whether the U.S. would attack Iran by Jan. 14. Trading volume and odds spiked amid protests and the temporary closure of Iranian airspace. The attack did not happen; the market later settled “No,” wiping out that trader’s position, but not before the activity drew significant global attention. Why analysts are worried - Market watchers warn these patterns may reflect “information laundering”: placing large, strategically timed bets to shift market odds, then amplifying those shifts via bots and social channels so they appear as breaking intelligence signals. Polymarket data is widely reposted on platforms like X (formerly Twitter) and Telegram, and coordinated trades can produce news coverage or market moves before official confirmation. - Those dynamics raise concerns that decentralized prediction markets — intended to aggregate information — could be weaponized to influence public opinion, diplomatic narratives, and even traditional financial markets. Regulatory fallout - The controversy has reached Congress. Representative Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would bar U.S. officials from trading on prediction markets about government actions if they hold non‑public information. The bill has dozens of House cosponsors but has not been voted on and has no Senate counterpart. - So far, investigators have not produced conclusive evidence tying the Iran‑related trades to U.S. government insiders. Still, the pattern of sudden, large bets and rapid reversals highlights regulatory gray areas around on‑chain prediction markets and the potential for misuse. Bottom line Polymarket’s recent episodes underscore a growing dilemma for decentralized forecasting platforms: they can surface useful signals, but without clearer rules and oversight, they may also enable manipulation that magnifies geopolitical risk. Watchers say regulators, platform operators and market participants will need to act quickly if prediction markets are to remain reliable tools rather than instruments that shape the news. Read more AI-generated news on: undefined/news

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