An Prediction Market Participant Earned $Nearly Half a Million on Bets Predicting Venezuela's Political Shift.
A bettor made nearly half a million dollars by predicting the removal of Nicolás Maduro immediately preceding it was officially announced, raising questions about whether someone profited from non-public details of the event.
Market Movement in Wagers
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be out of power by the month's conclusion surged in the time leading up to President Donald Trump declared on January 3rd that the president had been taken into custody.
A particular user, which registered on the site recently and took four positions, all on political events in Venezuela, profited a total of $436,000 from a modest bet of $32,537.
The identity is unknown. This unidentified trader had only a string of letters and numbers for identification.
Odds Fluctuate Before Public Statement
Platform data shows that participants estimated the likelihood of the president's removal at just a low 6.5 percent in the afternoon of the prior Friday.
Yet these probabilities had increased to eleven percent by shortly before midnight and surged in the morning of January 3rd, pointing to a sharp shift in market sentiment immediately prior to the official statement was made.
"This particular bet has all the signs of a trade based on inside information," commented Dennis Kelleher.
Several of other platform users also earned large payouts from bets on the same outcome.
Legal Questions Grows
Elected officials are growing concerned.
A bill introduced on Monday aims to prohibit government employees from making trades on prediction markets if they have "material nonpublic information" related to a bet.
Market Background
Event-driven betting sites have surged in popularity in the past few years, with users able to bet on everything from elections to political events.
Prediction markets were examined under the last presidential term. However it has experienced less resistance during the Trump presidency.
Trading on insider information is illegal in the traditional financial markets, but there are fewer regulations in the forecasting space.
An official representative for another major platform said their site "strictly forbids such activities of any form."
