An Prediction Market Participant Profited $436,000 from Bets on the Ouster of Maduro.
An individual made nearly half a million dollars by predicting the removal of Venezuela's president immediately preceding it was officially announced, raising questions about whether someone profited from confidential information of the event.
Sudden Shift in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be out of power by the close of the month rose in the time leading up to Donald Trump announced on January 3rd that Maduro had been apprehended.
A single trader, which joined the platform last month and placed four wagers, all on Venezuela, profited a total of $nearly half a million from a modest bet of $32.5K.
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 put the odds of Maduro's exit at just 6.5% in the midday period of the Friday before the event.
However the market's assessment had jumped to over 10% by late Friday night and skyrocketed in the early hours of the next day, suggesting a sharp shift in positions right before the official statement was made.
"This specific wager has all the hallmarks of a trade based on non-public details," said a financial reform advocate.
A handful of other platform users also made significant sums from bets on the same outcome.
Regulatory Scrutiny Grows
Politicians are beginning to pay attention.
Proposed legislation presented on Monday would prevent government employees from placing bets on forecasting platforms if they have "insider details" related to a market.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in the past few years, with participants able to wager on everything from elections to politics.
The industry encountered regulatory challenges under the last presidential term. But it has experienced less resistance during the present political climate.
Insider trading is a crime in the securities markets, but there are more ambiguous rules in the prediction market space.
A spokesperson for another major platform said their site "explicitly prohibits trading on insider information of any form."
