An Prediction Market Participant Earned $436,000 on Wagers Predicting Maduro's Downfall.
A trader earned a substantial sum on the ouster of the Venezuelan leader just before it was officially announced, leading to inquiries about potential gains made from inside knowledge of the event.
Sudden Shift in Forecasts
Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be out of power by the close of the month increased in the time leading up to President Donald Trump declared on the weekend that Maduro had been seized.
One account, which became a member in December and placed four wagers, all on political events in Venezuela, earned over $436K from a modest bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a blockchain identifier for identification.
Probability Spikes Before Announcement
Platform data shows that traders put the odds of a political change at just a low 6.5 percent in the afternoon of the prior Friday.
However the market's assessment had jumped to over 10% by the end of the day and skyrocketed in the first hours of the next day, pointing to a rapid movement in positions right before the official statement was made.
"This particular bet has all the signs of a trade based on inside information," commented Dennis Kelleher.
A small number of other platform users also profited significant sums from similar wagers.
Political Attention Grows
Some lawmakers are beginning to pay attention.
Proposed legislation introduced on recently would prevent government employees from placing bets on prediction markets if they have "material nonpublic information" related to a wager.
Industry Context
Forecasting platforms have become increasingly popular in the past few years, with traders able to wager on everything from sports to current affairs.
The industry encountered regulatory challenges under the last presidential term. But it has experienced less resistance during the current presidency.
Using confidential knowledge is against the law in the securities markets, but there are less oversight in the prediction market space.
An official representative for another major platform said their site "strictly forbids trading on insider information of any form."
