A Forecasting Platform Participant Made $436K from Bets Predicting Maduro's Downfall.
A trader profited close to $500,000 by predicting the removal of the Venezuelan leader just before it was publicly declared, raising questions about whether someone profited from confidential information of the US operation.
Changing Odds in Wagers
Bets placed on the crypto-platform, an online prediction market, that the leader would be no longer in control by the close of the month surged in the hours before Donald Trump announced on January 3rd that the president had been seized.
A particular user, which registered on the site recently and took four positions, all on political events in Venezuela, profited a total of $436,000 from a modest bet of $32.5K.
The identity is unknown. The anonymous account had only a blockchain identifier for identification.
Probability Spikes Before Public Statement
Market statistics shows that traders assessed the probability of a political change 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 eleven percent by late Friday night and spiked dramatically in the early hours of January 3rd, pointing to a sharp shift in positions immediately prior to the public announcement was made.
"That trade has all the signs of a trade based on non-public details," commented Dennis Kelleher.
Several of other traders also made tens of thousands of dollars from similar wagers.
Political Attention Emerges
Politicians are starting to take note.
A new rule presented on Monday would prevent federal workers from placing bets on prediction markets if they have "confidential government knowledge" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in recent years, with traders able to predict everything from sports to political events.
This sector faced scrutiny under the previous administration. But it has received a warmer welcome during the current presidency.
Trading on insider information is illegal in the securities markets, but there are more ambiguous rules in the event betting industry.
A spokesperson for another major platform said their site "strictly forbids trading on insider information of any form."
