An Prediction Market User Earned $436K from Bets Predicting Venezuela's Political Shift.
A bettor earned a substantial sum on the ouster of Nicolás Maduro just before it was made public, leading to inquiries about whether someone profited from non-public details of the event.
Changing Odds in Wagers
Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be no longer in control by the month's conclusion surged in the time leading up to former President Trump stated on January 3rd that Maduro had been taken into custody.
A particular user, which joined the platform last month and took four positions, all on political events in Venezuela, profited a total of $nearly half a million from a initial bet of $32.5K.
Who placed the bet is a mystery. The anonymous account had only a blockchain identifier 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 Friday, January 2nd.
However the odds had jumped to over 10% by the end of the day and spiked dramatically in the early hours of Saturday, pointing to a rapid movement in market sentiment just before the official statement was made.
"This particular bet has all the characteristics of a bet based on inside information," stated Dennis Kelleher.
A handful of other traders also earned large payouts from predicting the capture.
Regulatory Scrutiny Grows
Some lawmakers are starting to take note.
A bill presented on Monday would prevent public officials from participating on prediction markets if they have "insider details" related to a bet.
Market Background
Prediction markets have surged in popularity in recent years, with participants able to bet on everything from elections to current affairs.
The industry were examined under the previous administration. Yet it has received a warmer welcome during the Trump presidency.
Trading on insider information is illegal in the securities markets, but there are fewer regulations in the forecasting industry.
A company executive for another major platform said their site "strictly forbids insider trading of any form."
