Suspicious bets on a US-Cuba war raise eyebrows in prediction markets

Analysts of prediction markets are on high alert for insiders, so-called "sharps," and trades that stand out as suspicious. One trader on the future of Cuba has their attention.

An anonymous trader with the username JeffHK joined Polymarket in February and laid out $57,500 in only one market: Will the U.S. invade Cuba in 2026?

The "yes" bet was so large in the young market about Cuba that it actually moved the odds against him, and resulted in what experts call "slippage."

"You’ve got someone who’s either very inexperienced, or unsophisticated with high confidence," says Gary Morland, co-founder of the firm Betting Intelligence. "It’s such an outsized bet, it’s likely he believes he knows something others don’t."

The trade had several suspicious indicators, according to the firm: no warm-up trades, no diversification and no other portfolio. The huge position, just weeks into a new account, is well outside the Polymarket curve, they found.

"The slippage that JeffHK endured in his largest trade represents either a glaring error in his execution or a desperation to get his order filled at any price point," Betting Intelligence co-founder Dan Zimmermann wrote in a report to USA TODAY.

The bet comes in the wake of high-profile insider scandals, including the military member charged with profiting off classified information in the U.S. raid on Venezuela.

Some members of Congress pledged to crack down on the insider betting practices this week.

For its part, Polymarket says it has robust systems to detect insider trades. The company declined to comment on the specific Cuba markets, but pointed to previous comments about the 38-year-old U.S. soldier charged.

"We flagged this, referred it, and cooperated throughout the process. This happens constantly behind the scenes, despite what many are led to believe," wrote Polymarket Founder & CEO Shayne Coplan. "The transparency afforded by onchain markets makes global compliance more effective than ever. Every trade is public, permanent, and auditable. Bad actors leave a trail."

History of Cuba markets

Polymarket offers three markets related to Cuba with varying language from "invade" to "military clash" to "military action." Competitor market Kalshi has a related market about whether Cuban President Miguel Díaz-Canel will be out by the end of the year.

The markets are all trending "no" as of early May, with the spread around 21% to 45% chances of occurring.

After the anonymous trader JeffHK made his trades, sharp counter traders stepped in an pushed his holdings down in value, so he held a paper loss of $34,000 in early May when USA TODAY began contacting investors. Then, early on May 7, JeffHK sold much of his "yes" position, taking a five-figure loss.

He remains the top investor in the market and could still profit if the U.S. invades before the end of the year.

The Cuba prediction markets moved quickly on news from the Trump administration reported by USA TODAY. That occurred in mid-March, when the president announced "maximum pressure" on Havana, then again in mid-April with a reported two-week U.S. deadline and talk of a prisoner release.

Alex Goldenberg, founder of the intelligence firm Silent Index, said the Department of Justice's widely covered charge against the U.S. soldier will likely have a chilling effect on insiders. But he said the soldier could have taken basic steps to hide his identity that could have made him harder to detect.

And while millions of dollars are traded in the markets by betters looking for an edge, Goldenberg said Cuban intelligence and their allies in China and Russia are likely monitoring the markets as well.

"It would be foolish not to keep an eye on prediction markets," Goldenberg said. "Because we’ve seen the leakage of classified information with real world indicators of actual action."

Others holding say they’re convinced

USA TODAY tracked down two other "yes" holders convinced the U.S. will attack Cuba, including a real estate agent in Miami and a "whale," a high-volume, sophisticated trader.

The sixth-highest "yes" holder is Hugo Cardona Jr., who goes by "SnowballHustle" on the platform. He grew up in Miami and says Cuba was always a topic of conversation. He says he’s not an insider, and bet nearly $3,000 to take home $10,000 in the case of an invasion.

"Cuba is the ultimate U.S. real estate development plan," Cardona said. "The proximity is what changes everything, so I am betting they will be more aggressive with their plan and go for total control."

Cardona called the actions by JeffHK "very suspicious" but noted prediction markets are filled with gamblers and insiders willing to risk their careers for a profit.

Nick Penzenstadler is a reporter on the USA TODAY investigations team. Contact him at [email protected] or @npenzenstadler, or on Signal at (720) 507-5273.