A Prediction Market User Earned $436K on Wagers on the Ouster of Maduro.
An individual made nearly half a million dollars on the ouster of Venezuela's president shortly prior to it was officially announced, raising questions about potential gains made from inside knowledge of the US operation.
Changing Odds in Predictions
Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be out of power by the end of January increased in the time leading up to President Donald Trump announced on Saturday that Maduro had been seized.
One account, which joined the platform recently and placed four wagers, all on political events in Venezuela, profited a total of $436K from a modest bet of $32.5K.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Odds Fluctuate Before Announcement
Market statistics shows that participants assessed the probability of a political change at just a low 6.5 percent in the afternoon of the Friday before the event.
But these probabilities had jumped to eleven percent by the end of the day and surged in the morning of Saturday, suggesting a sharp shift in market sentiment right before the official statement was made.
"That trade has all the hallmarks of a trade based on non-public details," commented an industry expert.
A handful of other platform users also profited significant sums from predicting the capture.
Regulatory Scrutiny Emerges
Politicians are growing concerned.
A new rule presented on the start of the week would prevent public officials from making trades on prediction markets if they have "insider details" related to a wager.
The Prediction Market Landscape
Prediction markets have surged in popularity in recent years, with participants able to bet on everything from elections to political events.
The industry encountered regulatory challenges under the previous administration. Yet it has experienced less resistance during the Trump presidency.
Trading on insider information is illegal in the traditional financial markets, but there are less oversight in the forecasting arena.
A company executive for a competing service said their site "strictly forbids trading on insider information of any form."
