A Prediction Market Trader Earned $Nearly Half a Million on Bets on Maduro's Downfall.
An individual profited close to $500,000 on the ouster of the Venezuelan leader shortly prior to it was made public, raising questions about whether someone profited from confidential information of the US operation.
Sudden Shift in Wagers
Bets placed on the crypto-platform, a crypto-powered platform, that the Venezuelan president would be removed from office by the end of January rose in the hours before President Donald Trump stated on January 3rd that Maduro had been seized.
A particular user, which joined the platform last month and made four bets, all on Venezuela, made more than $436K from a starting bet of $32,537.
The identity is unknown. The anonymous account had only a blockchain identifier for identification.
Market Signals Before Announcement
Platform data shows that traders assessed the probability of a political change at just 6.5% in the afternoon of the Friday before the event.
But the market's assessment had climbed to over 10% by the end of the day and surged in the early hours of the next day, pointing to a rapid movement in market sentiment immediately prior to the social media post was made.
"This particular bet has all the characteristics of a transaction based on inside information," stated Dennis Kelleher.
A small number of other platform users also made large payouts from bets on the same outcome.
Regulatory Scrutiny Intensifies
Some lawmakers are starting to take note.
Proposed legislation presented on Monday would prevent public officials from making trades on prediction markets if they have "insider details" related to a bet.
The Prediction Market Landscape
Forecasting platforms have grown significantly in recent years, with traders able to predict everything from sports outcomes to politics.
The industry faced scrutiny under the previous administration. However it has received a warmer welcome during the present political climate.
Trading on insider information is a crime in the traditional financial markets, but there are less oversight in the event betting arena.
A spokesperson for another major platform said their site "explicitly prohibits insider trading of any form."
