An Prediction Market Participant Earned $436,000 on Bets on Maduro's Downfall.
A bettor made nearly half a million dollars by predicting the removal of Venezuela's president just before it was made public, raising questions about potential gains made from confidential information of the event.
Changing Odds in Predictions
Predictions made on the forecasting site, a blockchain-based service, that the Venezuelan president would be out of power by the month's conclusion rose in the hours before Donald Trump declared on the weekend that the Venezuelan leader had been apprehended.
One account, which joined the platform last month and made four bets, all on political events in Venezuela, earned over $436K from a starting bet of $32,537.
It remains unclear. The anonymous account had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Market statistics shows that participants estimated the likelihood of the president's removal at just under 7% in the midday period of the prior Friday.
However the market's assessment had increased to eleven percent by late Friday night and skyrocketed in the morning of January 3rd, suggesting a sudden change in positions just before the official statement was made.
"That trade has all the hallmarks of a bet based on confidential knowledge," said a financial reform advocate.
A handful of other individuals also profited tens of thousands of dollars from predicting the capture.
Regulatory Scrutiny Emerges
Elected officials are growing concerned.
Proposed legislation presented on Monday would prevent government employees from participating on forecasting platforms if they have "material nonpublic information" related to a market.
Market Background
Forecasting platforms have surged in popularity in the United States, with participants able to predict everything from elections to political events.
Prediction markets encountered regulatory challenges under the previous administration. Yet it has experienced less resistance during the current presidency.
Insider trading is illegal in the securities markets, but there are less oversight in the event betting industry.
A spokesperson for another major platform said their site "has clear rules against trading on insider information of any form."
