A Forecasting Platform Trader Earned $Nearly Half a Million from Wagers Predicting Maduro's Downfall.
A bettor made nearly half a million dollars on the ouster of Venezuela's president immediately preceding it was publicly declared, leading to inquiries about potential gains made from confidential information of American actions.
Changing Odds in Wagers
Predictions made on the forecasting site, an online prediction market, that the leader would be no longer in control by the close of the month surged in the hours before President Donald Trump stated on Saturday that the president had been seized.
One account, which became a member in December and made four bets, all on the Venezuelan situation, made more than $436,000 from a modest bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a blockchain identifier for identification.
Probability Spikes Before Announcement
Trading information shows that users estimated the likelihood of a political change at just a low 6.5 percent in the afternoon of the prior Friday.
But these probabilities had increased to 11% by the end of the day and surged in the first hours of Saturday, suggesting a rapid movement in positions immediately prior to the public announcement was made.
"This particular bet has all the signs of a transaction based on non-public details," stated a financial reform advocate.
A small number of other individuals also made significant sums from predicting the capture.
Legal Questions Intensifies
Some lawmakers are growing concerned.
Proposed legislation put forward on recently seeks to ban government employees from placing bets on forecasting platforms if they have "confidential government knowledge" related to a market.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in recent years, with users able to predict everything from sports outcomes to politics.
The industry faced scrutiny under the previous administration. Yet 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 prediction market space.
A company executive for a competing service said their site "has clear rules against such activities of any form."
