A Prediction Market Trader Made $436,000 on Wagers on Maduro's Downfall.
An individual made nearly half a million dollars on the ouster of Nicolás Maduro immediately preceding it was made public, raising questions about potential gains made from inside knowledge of American actions.
Changing Odds in Wagers
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be out of power by the month's conclusion increased in the hours before President Donald Trump declared on Saturday that Maduro had been taken into custody.
One account, which registered on the site in December and placed four wagers, all on the Venezuelan situation, made more than $nearly half a million from a starting bet of $32.5K.
Who placed the bet is a mystery. The user had only a blockchain identifier for identification.
Probability Spikes Before Announcement
Trading information shows that participants estimated the likelihood of Maduro's exit at just under 7% in the late afternoon of the Friday before the event.
However the market's assessment had climbed to 11% by late Friday night and skyrocketed in the first hours of January 3rd, indicating a rapid movement in market sentiment immediately prior to the social media post was made.
"This particular bet has all the hallmarks of a bet based on confidential knowledge," stated a financial reform advocate.
A handful of other platform users also profited tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Grows
Politicians are growing concerned.
A bill presented on Monday seeks to ban public officials from participating on forecasting platforms if they have "material nonpublic information" related to a market.
Industry Context
Event-driven betting sites have become increasingly popular in the past few years, with participants able to wager on everything from sports outcomes to politics.
This sector encountered regulatory challenges under the previous administration. Yet it has received a warmer welcome during the present political climate.
Using confidential knowledge is illegal in the securities markets, but there are fewer regulations in the prediction market industry.
An official representative for another major platform said their site "explicitly prohibits trading on insider information of any form."
