A Prediction Market Trader Made $Nearly Half a Million from Wagers Predicting the Ouster of Maduro.
An individual earned a substantial sum on the ouster of the Venezuelan leader just before it was officially announced, leading to inquiries about potential gains made from confidential information of American actions.
Sudden Shift in Wagers
Bets placed on the crypto-platform, a crypto-powered platform, that the leader would be out of power by the end of January surged in the time leading up to President Donald Trump declared on Saturday that Maduro had been taken into custody.
A particular user, which became a member recently and placed four wagers, all on Venezuela, earned over $436K from a modest bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a cryptographic address for identification.
Market Signals Before News Break
Trading information shows that traders estimated the likelihood of Maduro's exit at just a low 6.5 percent in the afternoon of Friday, January 2nd.
Yet the market's assessment had increased to eleven percent by shortly before midnight and spiked dramatically in the morning of the next day, pointing to a rapid movement in betting activity just before the social media post was made.
"That trade has all the characteristics of a bet based on inside information," commented an industry expert.
A handful of other traders also profited large payouts from bets on the same outcome.
Regulatory Scrutiny Grows
Some lawmakers are beginning to pay attention.
A bill put forward on Monday seeks to ban government employees from participating on prediction markets if they have "insider details" related to a wager.
The Prediction Market Landscape
Prediction markets have surged in popularity in recent years, with users able to predict everything from sports outcomes to politics.
The industry faced scrutiny under the previous administration. However it has found a more favorable environment during the present political climate.
Insider trading is illegal in the securities markets, but there are less oversight in the forecasting space.
A company executive for a competing service said their site "explicitly prohibits such activities of any form."
