An Forecasting Platform Trader Profited $436,000 from Wagers Predicting the Ouster of Maduro.
An individual made nearly half a million dollars by predicting the removal of Nicolás Maduro just before it was officially announced, leading to inquiries about the possibility of profiting from non-public details of the event.
Sudden Shift in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be removed from office by the end of January surged in the time leading up to Donald Trump declared on January 3rd that the Venezuelan leader had been seized.
A particular user, which joined the platform recently and placed four wagers, all on the Venezuelan situation, earned over $nearly half a million from a initial bet of $32,537.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Probability Spikes Before Announcement
Market statistics shows that users put the odds of Maduro's exit at just 6.5% in the late afternoon of the Friday before the event.
However these probabilities had climbed to eleven percent by the end of the day and spiked dramatically in the early hours of the next day, suggesting a sudden change in betting activity immediately prior to the official statement was made.
"That trade has all the characteristics of a transaction based on confidential knowledge," said an industry expert.
Several of other platform users also made significant sums from bets on the same outcome.
Regulatory Scrutiny Intensifies
Elected officials are starting to take note.
A new rule put forward on Monday would prevent government employees from participating on prediction markets if they have "confidential government knowledge" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have surged in popularity in the United States, with users able to wager on everything from elections to politics.
Prediction markets faced scrutiny under the last presidential term. Yet it has found a more favorable environment during the Trump presidency.
Insider trading is a crime in the stock market, but there are less oversight in the forecasting arena.
A company executive for another major platform said their site "has clear rules against trading on insider information of any form."
