Prediction markets, once hailed for their accuracy in forecasting events, are under scrutiny following incidents of insider trading and ethical concerns. A notable case involved a $30,000 bet on Polymarket predicting the removal of Venezuela's President Nicolás Maduro, which resulted in a $400,000 profit after his unexpected arrest by the U.S. military. This incident highlights the potential for markets to exploit information asymmetry rather than discover truth. The rapid growth of prediction markets, with platforms like Kalshi and Polymarket processing billions in trading volume, has attracted Wall Street's attention. However, regulatory and ethical challenges persist, as seen in the Zelenskyy suit market controversy, where large token holders manipulated outcomes for profit. These developments underscore the need for clearer regulations and ethical guidelines as prediction markets integrate further into financial systems.