A Forecasting Platform Participant Earned $Nearly Half a Million from Bets on Maduro's Downfall.
A trader profited close to $500,000 on the ouster of Venezuela's president immediately preceding it was publicly declared, raising questions about potential gains made from confidential information of the event.
Sudden Shift in Forecasts
Predictions made on the forecasting site, a blockchain-based service, that the leader would be removed from office by the close of the month rose in the hours before former President Trump announced on Saturday that the Venezuelan leader had been seized.
One account, which became a member recently and made four bets, all on political events in Venezuela, earned over $nearly half a million from a starting bet of over $32,000.
Who placed the bet is a mystery. This unidentified trader had only a blockchain identifier for identification.
Probability Spikes Before News Break
Platform data shows that users estimated the likelihood of the president's removal at just 6.5% in the midday period of the Friday before the event.
Yet these probabilities had climbed to eleven percent by late Friday night and surged in the early hours of January 3rd, indicating a sudden change in positions right before the public announcement was made.
"This particular bet has all the signs of a transaction based on inside information," stated an industry expert.
A handful of other individuals also made tens of thousands of dollars from similar wagers.
Legal Questions Grows
Some lawmakers are starting to take note.
Proposed legislation presented on the start of the week seeks to ban public officials from participating on prediction markets if they have "confidential government knowledge" related to a wager.
Industry Context
Event-driven betting sites have become increasingly popular in recent years, with traders able to wager on everything from sports to political events.
This sector encountered regulatory challenges under the last presidential term. However it has received a warmer welcome during the Trump presidency.
Trading on insider information is against the law in the securities markets, but there are fewer regulations in the event betting arena.
A company executive for a competing service said their site "explicitly prohibits such activities of any form."
