An Prediction Market User Earned $436,000 from Bets Predicting Maduro's Downfall.
A trader profited close to $500,000 on the ouster of the Venezuelan leader immediately preceding it was publicly declared, raising questions about whether someone profited from inside knowledge of the event.
Sudden Shift in Forecasts
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be no longer in control by the month's conclusion surged in the period preceding former President Trump stated on Saturday that Maduro had been taken into custody.
A single trader, which registered on the site recently and took four positions, all on Venezuela, earned over $nearly half a million from a initial bet of $32,537.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Market Signals Before Announcement
Trading information shows that users estimated the likelihood of a political change at just under 7% in the midday period of the Friday before the event.
However the odds had climbed to 11% by the end of the day and spiked dramatically in the first hours of the next day, indicating a sudden change in betting activity immediately prior to the public announcement was made.
"That trade has all the characteristics of a bet based on non-public details," said an industry expert.
A small number of other traders also made large payouts from predicting the capture.
Political Attention Intensifies
Politicians are beginning to pay attention.
A bill presented on recently would prevent federal workers from placing bets on forecasting platforms if they have "insider details" related to a bet.
Industry Context
Forecasting platforms have surged in popularity in recent years, with participants able to wager on everything from sports to politics.
Prediction markets were examined under the previous administration. Yet it has found a more favorable environment during the current presidency.
Using confidential knowledge is illegal in the stock market, but there are fewer regulations in the forecasting industry.
An official representative for another major platform said their site "has clear rules against trading on insider information of any form."
