An Prediction Market Participant Earned $Nearly Half a Million on Bets Predicting the Ouster of Maduro.
An individual profited close to $500,000 from wagers on the downfall of Nicolás Maduro immediately preceding it was made public, raising questions about potential gains made from non-public details of the event.
Changing Odds in Predictions
Bets placed on the crypto-platform, a crypto-powered platform, that the Venezuelan president would be removed from office by the month's conclusion rose in the period preceding Donald Trump declared on the weekend that Maduro had been taken into custody.
A particular user, which registered on the site in December and placed four wagers, all on the Venezuelan situation, earned over $nearly half a million from a starting bet of $32,537.
Who placed the bet is a mystery. This unidentified trader had only a string of letters and numbers for identification.
Probability Spikes Before Announcement
Market statistics shows that traders estimated the likelihood of Maduro's exit at just 6.5% in the afternoon of the Friday before the event.
But these probabilities had jumped to eleven percent by shortly before midnight and skyrocketed in the first hours of the next day, suggesting a sudden change in positions just before the public announcement was made.
"That trade has all the signs of a bet based on inside information," stated Dennis Kelleher.
Several of other traders also made large payouts from bets on the same outcome.
Political Attention Grows
Some lawmakers are growing concerned.
Proposed legislation presented on Monday seeks to ban public officials from making trades on prediction markets if they have "confidential government knowledge" related to a bet.
The Prediction Market Landscape
Prediction markets have become increasingly popular in the past few years, with participants able to predict everything from sports to political events.
The industry faced scrutiny under the previous administration. However it has experienced less resistance during the present political climate.
Using confidential knowledge is illegal in the stock market, but there are less oversight in the forecasting industry.
A company executive for a competing service said their site "strictly forbids insider trading of any form."
