A Prediction Market Trader Earned $Nearly Half a Million on Bets Predicting the Ouster of Maduro.
A bettor made nearly half a million dollars by predicting the removal of the Venezuelan leader immediately preceding it was officially announced, raising questions about whether someone profited from non-public details of American actions.
Changing Odds in Predictions
Predictions made on the forecasting site, a blockchain-based service, that Nicolás Maduro would be out of power by the close of the month surged in the hours before President Donald Trump stated on the weekend that Maduro had been taken into custody.
A single trader, which became a member last month and placed four wagers, all on the Venezuelan situation, earned over $436K from a initial bet of over $32,000.
The identity is unknown. The anonymous account had only a cryptographic address for identification.
Odds Fluctuate Before Public Statement
Trading information shows that users put the odds of the president's removal at just a low 6.5 percent in the midday period of the Friday before the event.
But these probabilities had climbed to over 10% by the end of the day and surged in the morning of January 3rd, pointing to a sharp shift in market sentiment just before the official statement was made.
"This particular bet has all the characteristics of a transaction based on inside information," commented a financial reform advocate.
A handful of other traders also profited tens of thousands of dollars from bets on the same outcome.
Regulatory Scrutiny Emerges
Some lawmakers are beginning to pay attention.
A new rule put forward on the start of the week would prevent government employees from participating on forecasting platforms if they have "insider details" related to a bet.
The Prediction Market Landscape
Forecasting platforms have become increasingly popular in the United States, with participants able to bet on everything from elections to political events.
Prediction markets faced scrutiny under the previous administration. Yet it has experienced less resistance during the present political climate.
Using confidential knowledge is illegal in the stock market, but there are more ambiguous rules in the prediction market industry.
A spokesperson for a competing service said their site "has clear rules against insider trading of any form."
