A Prediction Market User Profited $436,000 on Bets on the Ouster of Maduro.
An individual profited close to $500,000 by predicting the removal of Nicolás Maduro immediately preceding it was officially announced, raising questions about the possibility of profiting from inside knowledge of the US operation.
Market Movement in Wagers
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be no longer in control by the end of January rose in the period preceding former President Trump announced on January 3rd that the Venezuelan leader had been seized.
One account, which joined the platform last month and took four positions, all on political events in Venezuela, earned over $436,000 from a initial bet of $32.5K.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Market Signals Before Announcement
Platform data shows that users estimated the likelihood of the president's removal at just a low 6.5 percent in the midday period of the prior Friday.
But the odds had jumped to over 10% by shortly before midnight and surged in the early hours of January 3rd, suggesting a sharp shift in market sentiment right before the social media post was made.
"This particular bet has all the characteristics of a bet based on confidential knowledge," said an industry expert.
Several of other individuals also made tens of thousands of dollars from similar wagers.
Political Attention Intensifies
Politicians are starting to take note.
Proposed legislation presented on Monday aims to prohibit government employees from making trades on prediction markets if they have "material nonpublic information" related to a bet.
Market Background
Event-driven betting sites have grown significantly in the past few years, with participants able to wager on everything from elections to politics.
The industry were examined under the last presidential term. Yet it has found a more favorable environment during the current presidency.
Using confidential knowledge is against the law in the stock market, but there are fewer regulations in the prediction market arena.
An official representative for a competing service said their site "explicitly prohibits trading on insider information of any form."