An Prediction Market Trader Earned $Nearly Half a Million on Wagers Predicting the Ouster of Maduro.
An individual profited close to $500,000 on the ouster of Nicolás Maduro shortly prior to it was made public, raising questions about potential gains made from inside knowledge of the US operation.
Sudden Shift in Predictions
Bets placed on the crypto-platform, an online prediction market, that the leader would be removed from office by the close of the month surged in the hours before former President Trump announced on Saturday that the Venezuelan leader had been taken into custody.
A particular user, which registered on the site in December and made four bets, all on Venezuela, made more than $436,000 from a starting bet of $32.5K.
The identity is unknown. The user had only a blockchain identifier for identification.
Market Signals Before Announcement
Market statistics shows that traders estimated the likelihood of the president's removal at just a low 6.5 percent in the midday period of the Friday before the event.
However the market's assessment had jumped to 11% by shortly before midnight and skyrocketed in the early hours of January 3rd, indicating a sharp shift in positions immediately prior to the public announcement was made.
"This specific wager has all the signs of a trade based on non-public details," commented a financial reform advocate.
A handful of other individuals also profited significant sums from bets on the same outcome.
Legal Questions Grows
Elected officials are growing concerned.
Proposed legislation put forward on Monday aims to prohibit government employees from participating on forecasting platforms if they have "material nonpublic information" related to a wager.
Industry Context
Event-driven betting sites have become increasingly popular in the United States, with users able to predict everything from sports to political events.
The industry were examined under the previous administration. But it has experienced less resistance during the Trump presidency.
Using confidential knowledge is a crime in the stock market, but there are fewer regulations in the prediction market industry.
An official representative for a competing service said their site "has clear rules against trading on insider information of any form."
