A Prediction Market User Made $Nearly Half a Million on Wagers on Venezuela's Political Shift.
An individual made nearly half a million dollars on the ouster of Nicolás Maduro shortly prior to it was made public, sparking debate about whether someone profited from confidential information of the US operation.
Changing Odds in Wagers
Predictions made on the forecasting site, an online prediction market, that Nicolás Maduro would be out of power by the end of January surged in the time leading up to Donald Trump announced on Saturday that the Venezuelan leader had been seized.
A particular user, which became a member in December and placed four wagers, all on Venezuela, made more than $436K from a starting bet of $32.5K.
It remains unclear. The user had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Market statistics shows that users put the odds of Maduro's exit at just a low 6.5 percent in the afternoon of the prior Friday.
Yet the odds had increased to eleven percent by late Friday night and spiked dramatically in the early hours of Saturday, pointing to a rapid movement in market sentiment immediately prior to the public announcement was made.
"That trade has all the hallmarks of a bet based on confidential knowledge," said an industry expert.
A small number of other individuals also earned large payouts from predicting the capture.
Regulatory Scrutiny Grows
Politicians are beginning to pay attention.
Proposed legislation put forward on the start of the week would prevent government employees from participating on forecasting platforms if they have "confidential government knowledge" related to a market.
Market Background
Event-driven betting sites have surged in popularity in recent years, with participants able to wager on everything from sports to politics.
Prediction markets faced scrutiny under the last presidential term. But it has experienced less resistance during the Trump presidency.
Trading on insider information is illegal in the stock market, but there are fewer regulations in the prediction market industry.
An official representative for another major platform said their site "has clear rules against such activities of any form."