I recently came across a pretty outrageous news story—truly, you never know what kind of people are out there. U.S. federal authorities have arrested a special forces soldier, and what he did is so unbelievable that it’s hard to believe—he actually made over $400k by betting on the fact that the President of Venezuela was arrested.

Here's what happened. Last January, shortly after Trump announced the news that the Venezuelan president had been detained, this soldier placed a bet of over $33,000 on the prediction market Polymarket. And guess what? That bet directly earned him more than $400,000 in profit. Do you call that coincidence? Federal investigators certainly don’t.

This caused quite a stir. Polymarket detected this abnormal trading activity, immediately launched an internal review, and then federal authorities got involved in a months-long insider trading investigation. Basically, it looks like this guy might have known in advance about the arrest of the Venezuelan president and used the prediction market to make a profit.

This incident actually highlights a problem—the security vulnerabilities in prediction markets. When someone with inside information can trade before the key news is made public, it’s hard to call that fair competition. Major geopolitical events like the arrest of a Venezuelan president should be driven by public information, but instead, some people are using it as an early arbitrage opportunity.