An Prediction Market User Made $Nearly Half a Million on Bets Predicting Maduro's Downfall.
An individual profited close to $500,000 by predicting the removal of Venezuela's president just before it was publicly declared, leading to inquiries about the possibility of profiting from non-public details of the US operation.
Sudden Shift in Forecasts
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be removed from office by the month's conclusion rose in the hours before Donald Trump declared on January 3rd that Maduro had been seized.
A single trader, which joined the platform last month and took four positions, all on Venezuela, profited a total of $436K from a initial bet of over $32,000.
The identity is unknown. The anonymous account had only a string of letters and numbers for identification.
Market Signals Before Public Statement
Trading information shows that participants estimated the likelihood of the president's removal at just 6.5% in the late afternoon of the Friday before the event.
Yet the market's assessment had jumped to eleven percent by the end of the day and surged in the first hours of the next day, indicating a sudden change in market sentiment right before the public announcement was made.
"That trade has all the signs of a trade based on non-public details," said a financial reform advocate.
A small number of other platform users also profited significant sums from predicting the capture.
Political Attention Emerges
Some lawmakers are beginning to pay attention.
A new rule introduced on the start of the week would prevent government employees from making trades on prediction markets if they have "confidential government knowledge" related to a bet.
The Prediction Market Landscape
Event-driven betting sites have grown significantly in the past few years, with users able to bet on everything from sports outcomes to current affairs.
Prediction markets were examined under the last presidential term. But it has experienced less resistance during the Trump presidency.
Trading on insider information is against the law in the stock market, but there are fewer regulations in the event betting space.
A spokesperson for a competing service said their site "has clear rules against such activities of any form."
