A Prediction Market Trader Earned $436,000 from Wagers on Maduro's Downfall.
A bettor made nearly half a million dollars on the ouster of Venezuela's president shortly prior to it was publicly declared, leading to inquiries about the possibility of profiting from inside knowledge of American actions.
Changing Odds in Forecasts
Bets placed on the crypto-platform, an online prediction market, that the leader would be out of power by the end of January rose in the period preceding Donald Trump announced on Saturday that the president had been seized.
A particular user, which joined the platform recently and made four bets, all on the Venezuelan situation, made more than $436K from a starting bet of $32,537.
Who placed the bet is a mystery. This unidentified trader had only a blockchain identifier for identification.
Market Signals Before News Break
Platform data shows that participants put the odds of the president's removal at just a low 6.5 percent in the afternoon of the Friday before the event.
However the odds had increased to 11% by the end of the day and spiked dramatically in the first hours of the next day, pointing to a sudden change in betting activity right before the official statement was made.
"This specific wager has all the characteristics of a bet based on inside information," said Dennis Kelleher.
A handful of other traders also made tens of thousands of dollars from predicting the capture.
Political Attention Grows
Politicians are beginning to pay attention.
A bill put forward on recently aims to prohibit government employees from making trades on forecasting platforms if they have "material nonpublic information" related to a wager.
Industry Context
Event-driven betting sites have surged in popularity in the United States, with users able to bet on everything from sports outcomes to current affairs.
The industry encountered regulatory challenges under the last presidential term. Yet it has found a more favorable environment during the present political climate.
Trading on insider information is a crime in the securities markets, but there are fewer regulations in the forecasting arena.
An official representative for a competing service said their site "strictly forbids such activities of any form."
