An Prediction Market Participant Made $436,000 on Wagers on Maduro's Downfall.
A bettor profited close to $500,000 on the ouster of the Venezuelan leader immediately preceding it was officially announced, raising questions about whether someone profited from confidential information of the event.
Market Movement in Forecasts
Bets placed on the crypto-platform, a blockchain-based service, that Nicolás Maduro would be removed from office by the close of the month surged in the time leading up to Donald Trump declared on Saturday that the Venezuelan leader had been taken into custody.
A single trader, which registered on the site in December and made four bets, all on Venezuela, made more than $nearly half a million from a modest bet of $32,537.
The identity is unknown. The user had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Market statistics shows that traders estimated the likelihood of a political change at just a low 6.5 percent in the afternoon of the prior Friday.
But the odds had climbed to 11% by shortly before midnight and skyrocketed in the early hours of Saturday, suggesting a sudden change in positions right before the public announcement was made.
"That trade has all the signs of a bet based on confidential knowledge," commented Dennis Kelleher.
A handful of other individuals also made large payouts from similar wagers.
Regulatory Scrutiny Intensifies
Politicians are growing concerned.
Proposed legislation put forward on the start of the week seeks to ban federal workers from placing bets on prediction markets if they have "insider details" related to a market.
Market Background
Event-driven betting sites have become increasingly popular in the past few years, with users able to wager on everything from sports outcomes to current affairs.
The industry faced scrutiny under the previous administration. But it has received a warmer welcome during the present political climate.
Using confidential knowledge is a crime in the traditional financial markets, but there are more ambiguous rules in the forecasting arena.
An official representative for a competing service said their site "strictly forbids trading on insider information of any form."
