A Prediction Market Participant Made $Nearly Half a Million from Wagers on Maduro's Downfall.
An individual made nearly half a million dollars on the ouster of Venezuela's president immediately preceding it was officially announced, sparking debate about whether someone profited from inside knowledge of the US operation.
Market Movement in Forecasts
Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be removed from office by the end of January surged in the hours before President Donald Trump announced on Saturday that Maduro had been taken into custody.
A particular user, which became a member recently and made four bets, all on the Venezuelan situation, profited a total of $436K from a starting bet of $32,537.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Market Signals Before Announcement
Trading information shows that traders put the odds of the president's removal at just 6.5% in the afternoon of the prior Friday.
But the odds had increased to over 10% by the end of the day and skyrocketed in the morning of January 3rd, indicating a sudden change in positions just before the official statement was made.
"This specific wager has all the characteristics of a bet based on confidential knowledge," commented Dennis Kelleher.
A small number of other individuals also made large payouts from predicting the capture.
Political Attention Emerges
Some lawmakers are beginning to pay attention.
A new rule introduced on recently seeks to ban public officials from placing bets on forecasting platforms if they have "confidential government knowledge" related to a wager.
Industry Context
Event-driven betting sites have become increasingly popular in the past few years, with traders able to predict everything from elections to political events.
The industry encountered regulatory challenges under the previous administration. Yet it has experienced less resistance during the present political climate.
Insider trading is a crime in the traditional financial markets, but there are less oversight in the prediction market industry.
A spokesperson for a competing service said their site "has clear rules against insider trading of any form."
