A Forecasting Platform Participant Profited $436,000 on Bets Predicting Venezuela's Political Shift.
A bettor made nearly half a million dollars from wagers on the downfall of the Venezuelan leader shortly prior to it was officially announced, raising questions about whether someone profited from confidential information of American actions.
Sudden Shift in Predictions
Bets placed on the crypto-platform, an online prediction market, that Nicolás Maduro would be removed from office by the end of January surged in the period preceding President Donald Trump stated on Saturday that the Venezuelan leader had been seized.
One account, which joined the platform last month and took four positions, all on Venezuela, earned over $nearly half a million from a starting bet of $32.5K.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Probability Spikes Before Announcement
Trading information shows that participants put the odds of the president's removal at just a low 6.5 percent in the afternoon of the prior Friday.
Yet the market's assessment had jumped to over 10% by shortly before midnight and spiked dramatically in the first hours of Saturday, indicating a sudden change in market sentiment just before the social media post was made.
"That trade has all the signs of a transaction based on non-public details," stated an industry expert.
A small number of other traders also made tens of thousands of dollars from predicting the capture.
Legal Questions Grows
Some lawmakers are beginning to pay attention.
Proposed legislation presented on Monday aims to prohibit government employees from making trades on prediction markets if they have "material nonpublic information" related to a market.
Market Background
Prediction markets have become increasingly popular in the United States, with traders able to bet on everything from sports to politics.
The industry faced scrutiny under the last presidential term. Yet it has found a more favorable environment during the Trump presidency.
Using confidential knowledge is illegal in the traditional financial markets, but there are more ambiguous rules in the event betting industry.
A spokesperson for a competing service said their site "explicitly prohibits trading on insider information of any form."
