A Forecasting Platform Trader Profited $436,000 on Bets Predicting Maduro's Downfall.
A bettor profited close to $500,000 from wagers on the downfall of Nicolás Maduro immediately preceding it was officially announced, sparking debate about the possibility of profiting from inside knowledge of the US operation.
Changing Odds in Predictions
Predictions made on the forecasting site, a blockchain-based service, that the leader would be no longer in control by the month's conclusion rose in the hours before Donald Trump announced on the weekend that the Venezuelan leader had been apprehended.
One account, which joined the platform recently and took four positions, all on the Venezuelan situation, earned over $nearly half a million from a starting bet of $32.5K.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Probability Spikes Before News Break
Platform data shows that users estimated the likelihood of a political change at just 6.5% in the afternoon of the prior Friday.
However these probabilities had climbed to eleven percent by late Friday night and surged in the first hours of January 3rd, indicating a sharp shift in market sentiment right before the social media post was made.
"That trade has all the hallmarks of a trade based on confidential knowledge," commented an industry expert.
A handful of other individuals also made tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Intensifies
Some lawmakers are growing concerned.
Proposed legislation presented on recently would prevent government employees from participating on prediction markets if they have "confidential government knowledge" related to a bet.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in the United States, with participants able to predict everything from elections to political events.
Prediction markets were examined under the last presidential term. Yet it has found a more favorable environment during the Trump presidency.
Trading on insider information is against the law in the securities markets, but there are fewer regulations in the event betting industry.
A spokesperson for a competing service said their site "strictly forbids such activities of any form."
