An Prediction Market Trader Made $Nearly Half a Million on Wagers Predicting Maduro's Downfall.
An individual made nearly half a million dollars on the ouster of the Venezuelan leader immediately preceding it was officially announced, leading to inquiries about the possibility of profiting from non-public details of American actions.
Market Movement in Forecasts
Predictions made on the forecasting site, a blockchain-based service, that the leader would be removed from office by the end of January rose in the hours before President Donald Trump declared on the weekend that the president had been taken into custody.
A single trader, which registered on the site recently and took four positions, all on political events in Venezuela, made more than $436K from a starting bet of $32,537.
The identity is unknown. This unidentified trader had only a blockchain identifier for identification.
Probability Spikes Before News Break
Platform data shows that participants assessed the probability of the president's removal at just under 7% in the midday period of the Friday before the event.
But the odds had jumped to eleven percent by the end of the day and surged in the first hours of January 3rd, suggesting a rapid movement in positions right before the social media post was made.
"This particular bet has all the hallmarks of a trade based on confidential knowledge," said Dennis Kelleher.
A small number of other individuals also made significant sums from predicting the capture.
Legal Questions Intensifies
Some lawmakers are beginning to pay attention.
A bill presented on recently aims to prohibit government employees from participating on prediction markets if they have "insider details" related to a wager.
Market Background
Event-driven betting sites have become increasingly popular in recent years, with users able to wager on everything from sports outcomes to current affairs.
Prediction markets encountered regulatory challenges under the last presidential term. Yet it has found a more favorable environment during the current presidency.
Trading on insider information is a crime in the traditional financial markets, but there are fewer regulations in the forecasting space.
A spokesperson for a competing service said their site "has clear rules against insider trading of any form."
