A Forecasting Platform User Earned $Nearly Half a Million on Bets Predicting the Ouster of Maduro.
A bettor profited close to $500,000 from wagers on the downfall of Venezuela's president shortly prior to it was officially announced, raising questions about whether someone profited from confidential information of the US operation.
Market Movement in Predictions
Predictions made on the forecasting site, a blockchain-based service, that the Venezuelan president would be removed from office by the close of the month rose in the hours before former President Trump stated on January 3rd that the president had been seized.
One account, which joined the platform recently and took four positions, all on Venezuela, profited a total of $436K from a starting bet of $32.5K.
The identity is unknown. This unidentified trader had only a cryptographic address for identification.
Odds Fluctuate Before Announcement
Market statistics shows that traders assessed the probability of Maduro's exit at just a low 6.5 percent in the afternoon of Friday, January 2nd.
But the odds had increased to over 10% by the end of the day and spiked dramatically in the early hours of January 3rd, pointing to a sudden change in betting activity right 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 small number of other individuals also profited tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Intensifies
Politicians are beginning to pay attention.
A new rule introduced on the start of the week seeks to ban public officials from participating on prediction markets if they have "material nonpublic information" related to a market.
The Prediction Market Landscape
Forecasting platforms have grown significantly in the United States, with users able to predict everything from sports to current affairs.
Prediction markets faced scrutiny under the previous administration. But 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 industry.
A company executive for a competing service said their site "has clear rules against trading on insider information of any form."
