An Forecasting Platform Trader Earned $436,000 on Bets Predicting Maduro's Downfall.
A trader made nearly half a million dollars by predicting the removal of Nicolás Maduro immediately preceding it was officially announced, sparking debate about the possibility of profiting from inside knowledge of American actions.
Changing Odds in Wagers
Bets placed on the crypto-platform, an online prediction market, that Nicolás Maduro would be removed from office by the month's conclusion increased in the period preceding Donald Trump stated on Saturday that the Venezuelan leader had been apprehended.
A particular user, which became a member last month and placed four wagers, all on political events in Venezuela, earned over $436,000 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.
Probability Spikes Before News Break
Market statistics shows that participants estimated the likelihood of the president's removal at just under 7% in the late afternoon of the prior Friday.
But the odds had climbed to 11% by shortly before midnight and skyrocketed in the early hours of Saturday, suggesting a rapid movement in betting activity right before the official statement was made.
"This specific wager has all the signs of a trade based on non-public details," commented Dennis Kelleher.
A handful of other traders also made significant sums from bets on the same outcome.
Political Attention Intensifies
Politicians are beginning to pay attention.
Proposed legislation presented on the start of the week would prevent government employees from participating on prediction markets if they have "confidential government knowledge" related to a bet.
Market Background
Prediction markets have become increasingly popular in recent years, with users able to bet on everything from sports to current affairs.
Prediction markets faced scrutiny under the previous administration. However it has found a more favorable environment during the Trump presidency.
Using confidential knowledge is against the law in the stock market, but there are less oversight in the forecasting space.
A company executive for a competing service said their site "strictly forbids such activities of any form."
