An Forecasting Platform Trader Profited $436,000 on Bets Predicting the Ouster of Maduro.
A bettor made nearly half a million dollars from wagers on the downfall of the Venezuelan leader immediately preceding it was officially announced, leading to inquiries about whether someone profited from confidential information of the event.
Market Movement in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be out of power by the end of January rose in the period preceding President Donald Trump announced on the weekend that the Venezuelan leader had been taken into custody.
A single trader, which became a member recently and made four bets, all on Venezuela, earned over $nearly half a million from a modest bet of $32,537.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Probability Spikes Before Announcement
Market statistics shows that traders assessed the probability of the president's removal at just 6.5% in the midday period of the prior Friday.
Yet the market's assessment had jumped to over 10% by the end of the day and spiked dramatically in the morning of Saturday, indicating a sharp shift in positions right before the public announcement was made.
"This specific wager has all the characteristics of a bet based on inside information," said an industry expert.
Several of other traders also profited tens of thousands of dollars from predicting the capture.
Legal Questions Emerges
Some lawmakers are beginning to pay attention.
A bill presented on recently aims to prohibit federal workers from participating on forecasting platforms if they have "material nonpublic information" related to a bet.
The Prediction Market Landscape
Event-driven betting sites have grown significantly in recent years, with participants able to wager on everything from sports outcomes to politics.
Prediction markets were examined under the last presidential term. However it has received a warmer welcome during the current presidency.
Trading on insider information is a crime in the securities markets, but there are more ambiguous rules in the forecasting space.
A spokesperson for a competing service said their site "strictly forbids trading on insider information of any form."
