An Prediction Market User Earned $Nearly Half a Million from Wagers Predicting the Ouster of Maduro.
A bettor earned a substantial sum by predicting the removal of Venezuela's president shortly prior to it was publicly declared, raising questions about whether someone profited from confidential information of the US operation.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that Nicolás Maduro would be out of power by the close of the month surged in the time leading up to former President Trump announced on Saturday that the president had been taken into custody.
One account, which registered on the site recently and made four bets, all on Venezuela, earned over $436K from a initial bet of $32.5K.
Who placed the bet is a mystery. The user had only a blockchain identifier for identification.
Probability Spikes Before News Break
Trading information shows that participants assessed the probability of Maduro's exit at just 6.5% in the midday period of Friday, January 2nd.
But these probabilities had increased to 11% by late Friday night and skyrocketed in the morning of the next day, pointing to a sharp shift in betting activity just before the public announcement was made.
"That trade has all the characteristics of a trade based on non-public details," commented an industry expert.
A handful of other individuals also earned large payouts from bets on the same outcome.
Legal Questions Emerges
Some lawmakers are growing concerned.
A new rule put forward on the start of the week would prevent government employees from participating on prediction markets if they have "material nonpublic information" related to a wager.
The Prediction Market Landscape
Prediction markets have become increasingly popular in the United States, with participants able to bet on everything from sports to political events.
This sector faced scrutiny under the previous administration. Yet it has received a warmer welcome during the present political climate.
Trading on insider information is a crime in the traditional financial markets, but there are fewer regulations in the forecasting arena.
A spokesperson for another major platform said their site "explicitly prohibits such activities of any form."
