An Prediction Market Participant Earned $436K from Bets on the Ouster of Maduro.
An individual made nearly half a million dollars from wagers on the downfall of the Venezuelan leader shortly prior to it was made public, raising questions about potential gains made from non-public details of the event.
Market Movement in Wagers
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be removed from office by the end of January rose in the period preceding former President Trump announced on Saturday that the Venezuelan leader had been seized.
A particular user, which joined the platform recently and placed four wagers, all on the Venezuelan situation, profited a total of $nearly half a million from a starting bet of $32,537.
The identity is unknown. The anonymous account had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Platform data shows that participants put the odds of the president's removal at just 6.5% in the midday period of the Friday before the event.
Yet these probabilities had increased to eleven percent by the end of the day and spiked dramatically in the first hours of January 3rd, pointing to a sudden change in market sentiment right before the social media post was made.
"That trade has all the hallmarks of a transaction based on inside information," commented a financial reform advocate.
A handful of other platform users also profited tens of thousands of dollars from predicting the capture.
Political Attention Grows
Elected officials are starting to take note.
A new rule presented on recently aims to prohibit public officials from placing bets on forecasting platforms if they have "confidential government knowledge" related to a wager.
Market Background
Prediction markets have grown significantly in the past few years, with participants able to wager on everything from sports to political events.
Prediction markets were examined under the last presidential term. Yet it has experienced less resistance during the present political climate.
Insider trading is illegal in the traditional financial markets, but there are less oversight in the prediction market industry.
A company executive for another major platform said their site "has clear rules against such activities of any form."
