An Prediction Market Participant Earned $Nearly Half a Million from Wagers on the Ouster of Maduro.
A trader profited close to $500,000 from wagers on the downfall of Venezuela's president just before it was made public, leading to inquiries about the possibility of profiting from inside knowledge of the US operation.
Sudden Shift in Predictions
Predictions made on the forecasting site, a crypto-powered platform, that the leader would be removed from office by the close of the month increased in the hours before President Donald Trump stated on Saturday that the president had been seized.
One account, which registered on the site in December and made four bets, all on Venezuela, made more than $436K from a starting bet of $32,537.
Who placed the bet is a mystery. The user had only a blockchain identifier for identification.
Market Signals Before News Break
Market statistics shows that users assessed the probability of the president's removal at just 6.5% in the afternoon of the Friday before the event.
However the odds had increased to eleven percent by late Friday night and spiked dramatically in the morning of Saturday, indicating a sharp shift in market sentiment right before the public announcement was made.
"That trade has all the signs of a trade based on non-public details," said a financial reform advocate.
A small number of other platform users also profited significant sums from similar wagers.
Legal Questions Emerges
Politicians are growing concerned.
A new rule presented on recently would prevent public officials from placing bets on prediction markets if they have "insider details" related to a bet.
Market Background
Prediction markets have surged in popularity in the United States, with users able to predict everything from sports to politics.
This sector encountered regulatory challenges under the last presidential term. Yet it has experienced less resistance during the present political climate.
Using confidential knowledge is a crime in the stock market, but there are less oversight in the prediction market arena.
A company executive for another major platform said their site "has clear rules against such activities of any form."