A Prediction Market Trader Earned $436K on Bets on Maduro's Downfall.
A trader profited close to $500,000 on the ouster of the Venezuelan leader just before it was officially announced, raising questions about whether someone profited from confidential information of the event.
Market Movement in Forecasts
Bets placed on the crypto-platform, a crypto-powered platform, that the leader would be no longer in control by the month's conclusion rose in the time leading up to former President Trump stated on Saturday that the president had been taken into custody.
A single trader, which registered on the site recently and took four positions, all on Venezuela, made more than $436,000 from a starting bet of $32.5K.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Market Signals Before Public Statement
Trading information shows that users put the odds of the president's removal at just under 7% in the late afternoon of the Friday before the event.
However the market's assessment had jumped to over 10% by late Friday night and surged in the morning of Saturday, suggesting a rapid movement in market sentiment right before the official statement was made.
"This particular bet has all the signs of a bet based on confidential knowledge," commented a financial reform advocate.
A small number of other traders also earned tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Grows
Elected officials are starting to take note.
Proposed legislation introduced on the start of the week aims to prohibit federal workers from participating 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 bet on everything from sports outcomes to current affairs.
Prediction markets faced scrutiny under the last presidential term. But it has found a more favorable environment during the current presidency.
Using confidential knowledge is illegal in the securities markets, but there are fewer regulations in the event betting space.
A spokesperson for another major platform said their site "has clear rules against trading on insider information of any form."
