A Forecasting Platform User Profited $Nearly Half a Million from Bets Predicting Maduro's Downfall.
A bettor made nearly half a million dollars from wagers on the downfall of Venezuela's president immediately preceding it was made public, sparking debate about the possibility of profiting from inside knowledge of American actions.
Market Movement in Forecasts
Predictions made on the forecasting site, a blockchain-based service, that the leader would be out of power by the close of the month surged in the period preceding Donald Trump declared on January 3rd that Maduro had been apprehended.
A single trader, which became a member recently and took four positions, all on Venezuela, made more than $436,000 from a modest bet of $32.5K.
The identity is unknown. The user had only a string of letters and numbers for identification.
Odds Fluctuate Before News Break
Trading information shows that users estimated the likelihood of the president's removal at just 6.5% in the afternoon of the Friday before the event.
But these probabilities had increased to 11% by shortly before midnight and surged in the first hours of the next day, indicating a sudden change in market sentiment right before the official statement was made.
"That trade has all the signs of a bet based on non-public details," commented Dennis Kelleher.
A small number of other traders also earned significant sums from similar wagers.
Political Attention Intensifies
Politicians are growing concerned.
Proposed legislation introduced on Monday aims to prohibit federal workers from making trades on prediction markets if they have "insider details" related to a wager.
Market Background
Prediction markets have become increasingly popular in recent years, with traders able to bet on everything from sports to current affairs.
Prediction markets encountered regulatory challenges under the previous administration. But it has received a warmer welcome during the present political climate.
Insider trading is illegal in the traditional financial markets, but there are less oversight in the prediction market space.
A spokesperson for a competing service said their site "explicitly prohibits insider trading of any form."
