An Forecasting Platform User Earned $436K on Bets on the Ouster of Maduro.
An individual made nearly half a million dollars on the ouster of the Venezuelan leader just before it was made public, raising questions about potential gains made from inside knowledge of the event.
Changing Odds in Wagers
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be removed from office by the month's conclusion rose in the period preceding Donald Trump declared on Saturday that the Venezuelan leader had been apprehended.
A particular user, which became a member recently and made four bets, all on Venezuela, profited a total of $436,000 from a initial bet of over $32,000.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Probability Spikes Before News Break
Trading information shows that users assessed the probability of Maduro's exit at just 6.5% in the midday period of the Friday before the event.
However these probabilities had increased to eleven percent by shortly before midnight and surged in the first hours of the next day, suggesting a rapid movement in betting activity immediately prior to the official statement was made.
"That trade has all the signs of a trade based on inside information," stated Dennis Kelleher.
Several of other traders also earned tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Grows
Politicians are growing concerned.
Proposed legislation presented on the start of the week would prevent government employees from making trades on forecasting platforms if they have "insider details" related to a wager.
Market Background
Prediction markets have surged in popularity in the United States, with participants able to wager on everything from elections to current affairs.
The industry encountered regulatory challenges under the previous administration. However it has found a more favorable environment during the Trump presidency.
Trading on insider information is illegal in the traditional financial markets, but there are less oversight in the forecasting arena.
A spokesperson for a competing service said their site "has clear rules against such activities of any form."
