An Forecasting Platform Trader Made $Nearly Half a Million on Bets on Maduro's Downfall.
A trader profited close to $500,000 from wagers on the downfall of Nicolás Maduro immediately preceding it was made public, raising questions about whether someone profited from confidential information of the US operation.
Changing Odds in Wagers
Bets placed on the crypto-platform, an online prediction market, that Nicolás Maduro would be out of power by the end of January rose in the period preceding President Donald Trump stated on the weekend that the president had been seized.
A particular user, which registered on the site recently and took four positions, all on the Venezuelan situation, made more than $436,000 from a modest bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a cryptographic address for identification.
Market Signals Before Public Statement
Platform data shows that traders assessed the probability of a political change at just 6.5% in the late afternoon of the Friday before the event.
However the market's assessment had increased to eleven percent by the end of the day and spiked dramatically in the first hours of January 3rd, indicating a sudden change in betting activity right before the public announcement was made.
"This particular bet has all the hallmarks of a transaction based on non-public details," stated Dennis Kelleher.
A handful of other individuals also made significant sums from bets on the same outcome.
Regulatory Scrutiny Intensifies
Politicians are starting to take note.
A new rule put forward on recently seeks to ban public officials from making trades on prediction markets if they have "insider details" related to a market.
The Prediction Market Landscape
Event-driven betting sites have grown significantly in the past few years, with traders able to wager on everything from sports to current affairs.
Prediction markets faced scrutiny under the previous administration. But 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 prediction market space.
An official representative for a competing service said their site "strictly forbids such activities of any form."
