An Prediction Market Trader Profited $Nearly Half a Million from Wagers Predicting Maduro's Downfall.
A bettor profited close to $500,000 on the ouster of the Venezuelan leader just before it was officially announced, raising questions about the possibility of profiting from non-public details of American actions.
Sudden Shift in Predictions
Bets placed on the crypto-platform, an online prediction market, that the leader would be removed from office by the month's conclusion rose in the period preceding Donald Trump declared on January 3rd that Maduro had been seized.
A particular user, which registered on the site recently and placed four wagers, all on the Venezuelan situation, earned over $436K from a modest bet of $32,537.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Probability Spikes Before Announcement
Trading information shows that participants put the odds of the president's removal at just under 7% in the late afternoon of the prior Friday.
But the market's assessment had jumped to eleven percent by late Friday night and surged in the early hours of Saturday, suggesting a sharp shift in positions right before the public announcement was made.
"This specific wager has all the signs of a transaction based on non-public details," commented a financial reform advocate.
A handful of other individuals also made tens of thousands of dollars from bets on the same outcome.
Political Attention Intensifies
Politicians are beginning to pay attention.
Proposed legislation introduced on recently would prevent government employees from making trades on prediction markets if they have "material nonpublic information" related to a bet.
Market Background
Event-driven betting sites have surged in popularity in the past few years, with users able to wager on everything from sports outcomes to politics.
Prediction markets were examined under the previous administration. However it has found a more favorable environment during the current presidency.
Using confidential knowledge is illegal in the securities markets, but there are fewer regulations in the forecasting space.
A company executive for a competing service said their site "has clear rules against trading on insider information of any form."
