A Prediction Market Participant Made $436K on Bets Predicting the Ouster of Maduro.
An individual made nearly half a million dollars by predicting the removal of Venezuela's president shortly prior to it was made public, leading to inquiries about potential gains made from inside knowledge of American actions.
Changing Odds in Predictions
Predictions made on the forecasting site, a blockchain-based service, that the Venezuelan president would be out of power by the end of January surged in the time leading up to former President Trump declared on the weekend that the president had been apprehended.
A particular user, which joined the platform recently and took four positions, all on Venezuela, made more than $436K from a initial bet of $32,537.
The identity is unknown. The user had only a cryptographic address for identification.
Market Signals Before News Break
Market statistics shows that users put the odds of Maduro's exit at just a low 6.5 percent in the afternoon of the Friday before the event.
However the odds had increased to 11% by the end of the day and surged in the morning of the next day, suggesting a sharp shift in betting activity right before the official statement was made.
"That trade has all the characteristics of a trade based on non-public details," stated an industry expert.
A small number of other platform users also made tens of thousands of dollars from predicting the capture.
Legal Questions Grows
Politicians are starting to take note.
Proposed legislation presented on recently aims to prohibit public officials from participating on forecasting platforms if they have "confidential government knowledge" related to a market.
The Prediction Market Landscape
Prediction markets have grown significantly in the past few years, with traders able to wager on everything from elections to current affairs.
This sector encountered regulatory challenges under the previous administration. But it has received a warmer welcome during the Trump presidency.
Using confidential knowledge is against the law in the traditional financial markets, but there are less oversight in the forecasting arena.
An official representative for a competing service said their site "explicitly prohibits trading on insider information of any form."
