An Prediction Market Participant Earned $436K from Wagers Predicting Maduro's Downfall.
An individual made nearly half a million dollars on the ouster of Venezuela's president immediately preceding it was officially announced, leading to inquiries about the possibility of profiting from confidential information of the event.
Market Movement in Forecasts
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be out of power by the end of January increased in the period preceding former President Trump stated on Saturday that the Venezuelan leader had been seized.
A particular user, which became a member recently and placed four wagers, all on the Venezuelan situation, made more than $nearly half a million from a initial bet of over $32,000.
The identity is unknown. This unidentified trader had only a string of letters and numbers for identification.
Market Signals Before News Break
Market statistics shows that users estimated the likelihood of Maduro's exit at just 6.5% in the late afternoon of the prior Friday.
But the odds had increased to over 10% by the end of the day and skyrocketed in the morning of the next day, suggesting a sudden change in betting activity right before the social media post was made.
"That trade has all the characteristics of a trade based on non-public details," stated a financial reform advocate.
Several of other platform users also profited significant sums from similar wagers.
Political Attention Intensifies
Politicians are growing concerned.
A bill presented on Monday would prevent government employees from participating on prediction markets if they have "material nonpublic information" related to a bet.
Market Background
Prediction markets have grown significantly in recent years, with traders able to predict everything from sports to current affairs.
Prediction markets encountered regulatory challenges under the previous administration. However it has experienced less resistance during the present political climate.
Insider trading is illegal in the stock market, but there are fewer regulations in the event betting arena.
A company executive for a competing service said their site "strictly forbids insider trading of any form."
