A Forecasting Platform User Earned $436,000 from Bets Predicting Maduro's Downfall.
A bettor made nearly half a million dollars on the ouster of the Venezuelan leader just before it was publicly declared, sparking debate about potential gains made from inside knowledge of the event.
Changing Odds in Wagers
Predictions made on the forecasting site, a crypto-powered platform, that the Venezuelan president would be no longer in control by the end of January rose in the time leading up to former President Trump stated on the weekend that Maduro had been seized.
A particular user, which became a member recently and made four bets, all on political events in Venezuela, profited a total of $436,000 from a starting bet of over $32,000.
Who placed the bet is a mystery. This unidentified trader had only a blockchain identifier for identification.
Probability Spikes Before Public Statement
Market statistics shows that traders assessed the probability of a political change at just 6.5% in the late afternoon of Friday, January 2nd.
But these probabilities had increased to 11% by the end of the day and skyrocketed in the first hours of the next day, pointing to a sharp shift in betting activity immediately prior to the public announcement was made.
"That trade has all the characteristics of a transaction based on non-public details," commented a financial reform advocate.
A handful of other individuals also made significant sums from predicting the capture.
Political Attention Emerges
Politicians are growing concerned.
A bill introduced on Monday would prevent federal workers from participating on prediction markets if they have "confidential government knowledge" related to a market.
The Prediction Market Landscape
Prediction markets have become increasingly popular in the United States, with participants able to predict everything from elections to politics.
The industry were examined under the previous administration. But it has experienced less resistance during the Trump presidency.
Trading on insider information is a crime in the traditional financial markets, but there are fewer regulations in the prediction market industry.
A company executive for a competing service said their site "explicitly prohibits trading on insider information of any form."
