A Prediction Market Trader Made $436K from Bets on the Ouster of Maduro.
A trader made nearly half a million dollars from wagers on the downfall of the Venezuelan leader immediately preceding it was officially announced, raising questions about potential gains made from inside knowledge of American actions.
Sudden Shift in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be no longer in control by the month's conclusion surged in the hours before Donald Trump declared on the weekend that the Venezuelan leader had been taken into custody.
One account, which became a member in December 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.
Odds Fluctuate Before News Break
Trading information shows that participants assessed the probability of the president's removal at just a low 6.5 percent in the afternoon of the Friday before the event.
Yet the odds had climbed to over 10% by shortly before midnight and skyrocketed in the morning of the next day, indicating a sharp shift in betting activity right before the official statement was made.
"This specific wager has all the signs of a bet based on non-public details," commented Dennis Kelleher.
Several of other traders also profited tens of thousands of dollars from bets on the same outcome.
Regulatory Scrutiny Grows
Politicians are beginning to pay attention.
A bill put forward on Monday aims to prohibit federal workers from placing bets on forecasting platforms if they have "insider details" related to a market.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in the past few years, with traders able to predict everything from elections to political events.
Prediction markets were examined under the last presidential term. But it has received a warmer welcome during the current presidency.
Trading on insider information is a crime in the stock market, but there are fewer regulations in the event betting space.
A spokesperson for another major platform said their site "has clear rules against insider trading of any form."
