A Prediction Market Trader Earned $Nearly Half a Million on Wagers on the Ouster of Maduro.
An individual earned a substantial sum on the ouster of Venezuela's president shortly prior to it was made public, raising questions about potential gains made from inside knowledge of the US operation.
Changing Odds in Wagers
Bets placed on the crypto-platform, an online prediction market, that the leader would be out of power by the end of January rose in the time leading up to President Donald Trump declared on the weekend that the president had been taken into custody.
One account, which registered on the site in December and took four positions, all on political events in Venezuela, earned over $nearly half a million from a starting bet of $32,537.
The identity is unknown. This unidentified trader had only a blockchain identifier for identification.
Probability Spikes Before Public Statement
Platform data shows that users estimated the likelihood of Maduro's exit at just 6.5% in the midday period of the Friday before the event.
However the odds had increased to over 10% by shortly before midnight and skyrocketed in the early hours of the next day, indicating a rapid movement in positions right before the official statement was made.
"That trade has all the hallmarks of a transaction based on confidential knowledge," said a financial reform advocate.
Several of other traders also earned tens of thousands of dollars from bets on the same outcome.
Legal Questions Emerges
Some lawmakers are starting to take note.
A new rule presented on the start of the week aims to prohibit public officials from placing bets on prediction markets if they have "insider details" related to a market.
Market Background
Forecasting platforms have grown significantly in recent years, with traders able to bet on everything from elections to political events.
This sector were examined under the last presidential term. However it has received a warmer welcome during the present political climate.
Insider trading is a crime in the traditional financial markets, but there are more ambiguous rules in the event betting industry.
An official representative for a competing service said their site "has clear rules against such activities of any form."
