An Prediction Market User Made $436K on Wagers on the Ouster of Maduro.
A trader made nearly half a million dollars from wagers on the downfall of the Venezuelan leader just before it was made public, leading to inquiries about potential gains made from confidential information of American actions.
Sudden Shift in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be no longer in control by the month's conclusion surged in the period preceding Donald Trump declared on the weekend that the president had been seized.
A single trader, which joined the platform recently and took four positions, all on the Venezuelan situation, profited a total of $nearly half a million from a starting bet of $32.5K.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Market Signals Before Announcement
Trading information shows that users estimated the likelihood of Maduro's exit at just 6.5% in the afternoon of Friday, January 2nd.
Yet these probabilities had increased to over 10% by shortly before midnight and skyrocketed in the early hours of the next day, pointing to a sharp shift in market sentiment just before the social media post was made.
"This particular bet has all the characteristics of a transaction based on inside information," said an industry expert.
A small number of other platform users also earned tens of thousands of dollars from bets on the same outcome.
Political Attention Emerges
Some lawmakers are growing concerned.
A bill put forward on recently aims to prohibit public officials from placing bets on forecasting platforms if they have "confidential government knowledge" related to a bet.
The Prediction Market Landscape
Prediction markets have surged in popularity in the past few years, with participants able to predict everything from sports outcomes to political events.
Prediction markets were examined under the previous administration. However it has experienced less resistance during the Trump presidency.
Trading on insider information is against the law in the stock market, but there are less oversight in the forecasting space.
An official representative for a competing service said their site "strictly forbids insider trading of any form."
