A Prediction Market Trader Made $Nearly Half a Million from Bets Predicting the Ouster of Maduro.
A bettor profited close to $500,000 on the ouster of the Venezuelan leader just before it was made public, raising questions about potential gains made from inside knowledge of American actions.
Market Movement in Predictions
Wagers on Polymarket, a blockchain-based service, that the leader would be removed from office by the close of the month increased in the hours before Donald Trump stated on Saturday that the Venezuelan leader had been seized.
One account, which joined the platform in December and placed four wagers, all on political events in Venezuela, earned over $nearly half a million from a starting bet of $32,537.
Who placed the bet is a mystery. The user had only a blockchain identifier for identification.
Probability Spikes Before Announcement
Platform data shows that users put the odds of the president's removal at just under 7% in the afternoon of the Friday before the event.
However the market's assessment had increased to 11% by late Friday night and spiked dramatically in the morning of January 3rd, pointing to a rapid movement in positions immediately prior to the official statement was made.
"This specific wager has all the characteristics of a bet based on confidential knowledge," said an industry expert.
A small number of other individuals also profited tens of thousands of dollars from predicting the capture.
Legal Questions Emerges
Elected officials are starting to take note.
Proposed legislation put forward on the start of the week aims to prohibit government employees from making trades on forecasting platforms if they have "material nonpublic information" related to a wager.
The Prediction Market Landscape
Prediction markets have grown significantly in recent years, with participants able to predict everything from sports outcomes to current affairs.
Prediction markets faced scrutiny under the last presidential term. But it has received a warmer welcome during the current presidency.
Trading on insider information is a crime in the securities markets, but there are fewer regulations in the prediction market industry.
A spokesperson for another major platform said their site "strictly forbids trading on insider information of any form."
