A Prediction Market User Made $436,000 on Bets Predicting the Ouster of Maduro.
An individual profited close to $500,000 by predicting the removal of Nicolás Maduro immediately preceding it was officially announced, raising questions about potential gains made from confidential information of the event.
Changing Odds in Forecasts
Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be no longer in control by the close of the month rose in the hours before former President Trump stated on the weekend that the Venezuelan leader had been taken into custody.
One account, which joined the platform last month and made four bets, all on political events in Venezuela, 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 blockchain identifier for identification.
Probability Spikes Before Public Statement
Trading information shows that users assessed the probability of the president's removal at just 6.5% in the afternoon of the prior Friday.
Yet the market's assessment had increased to 11% by shortly before midnight and spiked dramatically in the first hours of the next day, suggesting a sudden change in market sentiment right before the official statement was made.
"That trade has all the hallmarks of a bet based on inside information," commented an industry expert.
A handful of other individuals also profited large payouts from similar wagers.
Regulatory Scrutiny Intensifies
Some lawmakers are growing concerned.
Proposed legislation introduced on the start of the week would prevent federal workers from making trades on forecasting platforms if they have "material nonpublic information" related to a wager.
Industry Context
Prediction markets have grown significantly in the United States, with participants able to predict everything from sports outcomes to political events.
This sector faced scrutiny under the previous administration. However it has received a warmer welcome during the Trump presidency.
Using confidential knowledge is against the law in the securities markets, but there are less oversight in the prediction market arena.
An official representative for another major platform said their site "explicitly prohibits such activities of any form."
