An Prediction Market Participant Earned $Nearly Half a Million on Bets on Maduro's Downfall.
An individual earned a substantial sum by predicting the removal of Venezuela's president just before it was officially announced, leading to inquiries about the possibility of profiting from confidential information of American actions.
Sudden Shift in Forecasts
Predictions made on the forecasting site, a crypto-powered platform, that the Venezuelan president would be no longer in control by the month's conclusion increased in the time leading up to Donald Trump declared on Saturday that the president had been seized.
A single trader, which joined the platform recently and placed four wagers, all on political events in Venezuela, profited a total of $436K from a modest bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a blockchain identifier for identification.
Probability Spikes Before Announcement
Platform data shows that traders estimated the likelihood of a political change at just 6.5% in the afternoon of the Friday before the event.
But the market's assessment had jumped to over 10% by late Friday night and spiked dramatically in the first hours of January 3rd, indicating a sudden change in betting activity immediately prior to the social media post was made.
"That trade has all the characteristics of a bet based on non-public details," said a financial reform advocate.
A small number of other platform users also made significant sums from predicting the capture.
Regulatory Scrutiny Emerges
Some lawmakers are growing concerned.
A new rule presented on the start of the week aims to prohibit public officials from making trades on prediction markets if they have "insider details" related to a bet.
Industry Context
Prediction markets have grown significantly in the past few years, with users able to predict everything from elections to politics.
The industry faced scrutiny under the last presidential term. However it has found a more favorable environment during the current presidency.
Insider trading is illegal in the traditional financial markets, but there are more ambiguous rules in the forecasting arena.
A spokesperson for another major platform said their site "explicitly prohibits insider trading of any form."
