An Forecasting Platform Trader Earned $436K on Wagers on the Ouster of Maduro.
A bettor profited close to $500,000 by predicting the removal of Venezuela's president immediately preceding it was officially announced, raising questions about the possibility of profiting from confidential information of American actions.
Changing Odds in Forecasts
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be removed from office by the close of the month rose in the hours before President Donald Trump declared on Saturday that the president had been apprehended.
A particular user, which became a member last month and placed four wagers, all on political events in Venezuela, profited a total of $436,000 from a modest bet of $32,537.
It remains unclear. The user had only a string of letters and numbers for identification.
Market Signals Before Announcement
Market statistics shows that participants put the odds of the president's removal at just under 7% in the late afternoon of the Friday before the event.
Yet the odds had jumped to over 10% by the end of the day and surged in the early hours of the next day, pointing to a sudden change in positions immediately prior to the public announcement was made.
"This specific wager has all the hallmarks of a trade based on inside information," said a financial reform advocate.
Several of other traders also made tens of thousands of dollars from predicting the capture.
Political Attention Grows
Elected officials are beginning to pay attention.
A bill introduced on Monday aims to prohibit government employees from placing bets on prediction markets if they have "material nonpublic information" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have grown significantly in recent years, with participants able to bet on everything from sports outcomes to political events.
This sector faced scrutiny under the previous administration. Yet it has received a warmer welcome during the current presidency.
Insider trading is illegal in the stock market, but there are more ambiguous rules in the prediction market arena.
An official representative for another major platform said their site "has clear rules against insider trading of any form."
