The prediction platform Polymarket faces intense international scrutiny after refusing to settle millions in wagers following the recent U.S. military operation in Venezuela. This decision has triggered a massive wave of anger among global retail investors.
U.S. special forces conducted a high-stakes raid in Caracas to seize Nicolás Maduro on 3 January 2026. While the mission successfully captured the Venezuelan leader, Polymarket officials declared that this specific action did not constitute a formal invasion.
The resolution committee of the platform argued that the betting contract required a sustained military offensive intended to occupy territory. They maintained that a snatch-and-extract mission failed to meet the technical criteria for a territorial invasion.
About 10.5 million U.S. dollars in active wagers were effectively nullified by the ruling. Almost immediately, the probability of an invasion occurring by January 31 crashed from near-certainty to under 5 percent, causing massive financial losses for thousands of traders.
Bettors accused the platform of shifting definitions to protect its liquidity. One prominent trader, known as Skinner, called the decision “sheer arbitrariness,” noting that kidnapping a head of state and changing national control defines an invasion clearly.
Adding to the chaos and confusion, U.S. President Donald Trump stated that the U.S. government would now run Venezuela. This declaration of administrative control led many to believe the invasion criteria were met, yet Polymarket remained firm in its refusal to pay.
The controversy has also fueled allegations of insider trading within the market. An anonymous account created in late December 2025 placed a 30,000 U.S. dollar bet on Maduro being “out” by January 31, suggesting prior knowledge of the secret military mission.
Note that the specific bet turned into a windfall of more than 436,000 U.S. dollars. Democratic Representative Ritchie Torres has since called for a formal investigation into whether non-public government information was leaked to certain well-connected traders.
The situation is further complicated by political connections. Donald Trump Jr. currently holds advisory roles at Polymarket and Kalshi, its competitor. This relationship has led to accusations of potential conflicts of interest regarding the resolution.