A Forecasting Platform User Made $436,000 on Wagers Predicting Maduro's Downfall.
A trader profited close to $500,000 by predicting the removal of Venezuela's president just before it was made public, sparking debate about whether someone profited from inside knowledge of the event.
Sudden Shift in Forecasts
Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be removed from office by the close of the month rose in the hours before Donald Trump declared on Saturday that Maduro had been taken into custody.
A particular user, which registered on the site last month and placed four wagers, all on the Venezuelan situation, made more than $nearly half a million from a modest bet of over $32,000.
It remains unclear. The user had only a string of letters and numbers for identification.
Odds Fluctuate Before News Break
Market statistics shows that traders put the odds of the president's removal at just 6.5% in the midday period of Friday, January 2nd.
But the odds had climbed to 11% by shortly before midnight and surged in the morning of the next day, pointing to a sharp shift in market sentiment right before the official statement was made.
"This specific wager has all the characteristics of a trade based on inside information," commented Dennis Kelleher.
Several of other platform users also profited large payouts from bets on the same outcome.
Political Attention Emerges
Politicians are starting to take note.
A new rule introduced on the start of the week aims to prohibit federal workers from placing bets on prediction markets if they have "confidential government knowledge" related to a market.
Market Background
Prediction markets have become increasingly popular in the past few years, with users able to predict everything from sports to political events.
This sector encountered regulatory challenges under the last presidential term. However it has experienced less resistance during the current presidency.
Using confidential knowledge is a crime in the traditional financial markets, but there are fewer regulations in the event betting arena.
A spokesperson for another major platform said their site "explicitly prohibits trading on insider information of any form."
