An Prediction Market User Made $436K on Wagers Predicting Maduro's Downfall.
A bettor made nearly half a million dollars by predicting the removal of Nicolás Maduro immediately preceding it was publicly declared, leading to inquiries about potential gains made from inside knowledge of the event.
Changing Odds in Forecasts
Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be removed from office by the end of January surged in the time leading up to former President Trump stated on Saturday that the president had been taken into custody.
One account, which registered on the site in December and took four positions, all on political events in Venezuela, made more than $436,000 from a modest bet of $32,537.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Market Signals Before Announcement
Platform data shows that traders estimated the likelihood of the president's removal at just a low 6.5 percent in the midday period of Friday, January 2nd.
However these probabilities had increased to eleven percent by shortly before midnight and spiked dramatically in the first hours of Saturday, indicating a rapid movement in market sentiment just before the public announcement was made.
"This specific wager has all the hallmarks of a trade based on inside information," commented Dennis Kelleher.
Several of other platform users also earned large payouts from predicting the capture.
Political Attention Grows
Politicians are beginning to pay attention.
A bill introduced on recently seeks to ban public officials from making trades on forecasting platforms if they have "insider details" related to a market.
Industry Context
Prediction markets have grown significantly in recent years, with users able to bet on everything from elections to political events.
The industry faced scrutiny under the previous administration. Yet it has received a warmer welcome during the present political climate.
Trading on insider information is illegal in the stock market, but there are more ambiguous rules in the prediction market arena.
A company executive for another major platform said their site "has clear rules against insider trading of any form."
