An Prediction Market User Made $Nearly Half a Million from Bets on the Ouster of Maduro.
A trader earned a substantial sum on the ouster of the Venezuelan leader shortly prior to it was officially announced, sparking debate about the possibility of profiting from non-public details of the event.
Changing Odds in Wagers
Predictions made on the forecasting site, a crypto-powered platform, that Nicolás Maduro would be out of power by the close of the month rose in the time leading up to former President Trump announced on the weekend that the Venezuelan leader had been apprehended.
One account, which became a member recently and took four positions, all on Venezuela, made more than $436K from a modest bet of $32,537.
It remains unclear. This unidentified trader had only a blockchain identifier for identification.
Probability Spikes Before News Break
Trading information shows that traders put the odds of the president's removal at just a low 6.5 percent in the late afternoon of the Friday before the event.
Yet the odds had climbed to eleven percent by shortly before midnight and skyrocketed in the early hours of the next day, suggesting a sudden change in betting activity right before the official statement was made.
"That trade has all the characteristics of a bet based on non-public details," commented a financial reform advocate.
A handful of other traders also earned large payouts from similar wagers.
Legal Questions Intensifies
Politicians are beginning to pay attention.
A bill introduced on Monday seeks to ban public officials from placing bets on prediction markets if they have "confidential government knowledge" related to a wager.
Market Background
Prediction markets have grown significantly in recent years, with participants able to predict everything from sports outcomes to politics.
This sector encountered regulatory challenges under the previous administration. However it has received a warmer welcome during the current presidency.
Trading on insider information is against the law in the securities markets, but there are fewer regulations in the event betting arena.
An official representative for a competing service said their site "has clear rules against insider trading of any form."
