A Forecasting Platform User Made $Nearly Half a Million from Bets Predicting Venezuela's Political Shift.
A trader made nearly half a million dollars on the ouster of Venezuela's president just before it was publicly declared, sparking debate about potential gains made from inside knowledge of American actions.
Market Movement in Wagers
Bets placed on the crypto-platform, an online prediction market, that the leader would be removed from office by the end of January increased in the period preceding Donald Trump declared on Saturday that Maduro had been taken into custody.
A particular user, which became a member recently and took four positions, all on Venezuela, made more than $nearly half a million from a starting bet of $32,537.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Odds Fluctuate Before Announcement
Platform data shows that users assessed the probability of the president's removal at just 6.5% in the midday period of the Friday before the event.
But the market's assessment had climbed to 11% by the end of the day and spiked dramatically in the early hours of Saturday, indicating a sharp shift in positions right before the social media post was made.
"This specific wager has all the hallmarks of a bet based on inside information," commented an industry expert.
Several of other platform users also earned large payouts from similar wagers.
Legal Questions Grows
Elected officials are growing concerned.
Proposed legislation put forward on Monday aims to prohibit government employees from placing bets on prediction markets if they have "confidential government knowledge" related to a market.
Industry Context
Event-driven betting sites have surged in popularity in recent years, with participants able to predict everything from sports outcomes to politics.
The industry were examined under the last presidential term. However it has experienced less resistance during the current presidency.
Trading on insider information is illegal in the stock market, but there are less oversight in the prediction market industry.
An official representative for another major platform said their site "strictly forbids insider trading of any form."