An Prediction Market User Profited $436K on Bets on Venezuela's Political Shift.
A bettor earned a substantial sum by predicting the removal of the Venezuelan leader just before it was made public, leading to inquiries about whether someone profited from confidential information of the event.
Market Movement in Predictions
Predictions made on the forecasting site, an online prediction market, that the leader would be out of power by the end of January rose in the hours before President Donald Trump stated on the weekend that the Venezuelan leader had been taken into custody.
A single trader, which became a member last month and took four positions, all on political events in Venezuela, profited a total of $436,000 from a starting bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a cryptographic address for identification.
Probability Spikes Before Public Statement
Market statistics shows that users assessed the probability of Maduro's exit at just under 7% in the afternoon of the Friday before the event.
However the market's assessment had climbed to over 10% by the end of the day and spiked dramatically in the first hours of the next day, pointing to a sudden change in betting activity just before the social media post was made.
"This particular bet has all the hallmarks of a bet based on non-public details," commented an industry expert.
Several of other traders also made tens of thousands of dollars from similar wagers.
Political Attention Grows
Some lawmakers are growing concerned.
Proposed legislation put forward on the start of the week would prevent federal workers from placing bets on forecasting platforms if they have "material nonpublic information" related to a bet.
The Prediction Market Landscape
Prediction markets have surged in popularity in recent years, with traders able to predict everything from sports to political events.
This sector were examined under the last presidential term. But it has experienced less resistance during the current presidency.
Insider trading 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 "explicitly prohibits trading on insider information of any form."
