A Prediction Market User Earned $Nearly Half a Million on Bets Predicting Venezuela's Political Shift.
An individual made nearly half a million dollars by predicting the removal of the Venezuelan leader shortly prior to it was publicly declared, raising questions about the possibility of profiting from inside knowledge of the US operation.
Market Movement in Forecasts
Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be no longer in control by the month's conclusion surged in the time leading up to President Donald Trump declared on January 3rd that Maduro had been taken into custody.
A single trader, which registered on the site in December and placed four wagers, all on Venezuela, profited a total of $436K from a starting bet of over $32,000.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Market Signals Before Announcement
Platform data shows that traders assessed the probability of Maduro's exit at just 6.5% in the late afternoon of Friday, January 2nd.
However the odds had jumped to over 10% by shortly before midnight and skyrocketed in the morning of the next day, pointing to a rapid movement in market sentiment right before the public announcement was made.
"This particular bet has all the hallmarks of a bet based on confidential knowledge," stated an industry expert.
A small number of other traders also made significant sums from predicting the capture.
Political Attention Emerges
Elected officials are growing concerned.
A new rule put forward on recently would prevent public officials from placing bets on prediction markets if they have "insider details" related to a wager.
Market Background
Forecasting platforms have become increasingly popular in the United States, with participants able to bet on everything from sports outcomes to current affairs.
Prediction markets encountered regulatory challenges under the previous administration. But it has found a more favorable environment during the current presidency.
Using confidential knowledge is against the law in the securities markets, but there are fewer regulations in the prediction market space.
A company executive for a competing service said their site "has clear rules against such activities of any form."
