A Prediction Market Participant Profited $Nearly Half a Million on Bets Predicting Maduro's Downfall.
A bettor profited close to $500,000 on the ouster of Venezuela's president shortly prior to it was publicly declared, leading to inquiries about the possibility of profiting from non-public details of the US operation.
Sudden Shift in Wagers
Bets placed on the crypto-platform, an online prediction market, that Nicolás Maduro would be out of power by the end of January rose in the hours before former President Trump declared on Saturday that Maduro had been seized.
One account, which became a member recently and took four positions, all on Venezuela, made more than $436,000 from a modest bet of over $32,000.
It remains unclear. The anonymous account had only a blockchain identifier for identification.
Probability Spikes Before News Break
Market statistics shows that traders put the odds of the president's removal at just under 7% in the midday period of the Friday before the event.
However the odds had increased to over 10% by the end of the day and surged in the morning of January 3rd, suggesting a rapid movement in betting activity right before the official statement was made.
"That trade has all the signs of a transaction based on inside information," commented a financial reform advocate.
Several of other traders also profited tens of thousands of dollars from similar wagers.
Political Attention Emerges
Some lawmakers are beginning to pay attention.
A bill put forward on Monday would prevent federal workers from making trades on forecasting platforms if they have "insider details" related to a wager.
Market Background
Forecasting platforms have surged in popularity in recent years, with users able to bet on everything from sports outcomes to politics.
Prediction markets were examined under the previous administration. However it has received a warmer welcome during the current presidency.
Using confidential knowledge is against the law in the securities markets, but there are more ambiguous rules in the event betting space.
A company executive for a competing service said their site "explicitly prohibits insider trading of any form."