An Prediction Market User Earned $Nearly Half a Million on Wagers on Venezuela's Political Shift.
An individual profited close to $500,000 by predicting the removal of Venezuela's president just before it was officially announced, sparking debate about potential gains made from confidential information of American actions.
Sudden Shift in Predictions
Bets placed on the crypto-platform, an online prediction market, that Nicolás Maduro would be no longer in control by the end of January rose in the time leading up to Donald Trump stated on January 3rd that the president had been apprehended.
One account, which registered on the site recently and took four positions, all on the Venezuelan situation, made more than $436,000 from a starting bet of over $32,000.
Who placed the bet is a mystery. The user had only a cryptographic address for identification.
Odds Fluctuate Before Public Statement
Platform data shows that participants put the odds of Maduro's exit at just under 7% in the midday period of the prior Friday.
However the odds had increased to eleven percent by late Friday night and spiked dramatically in the early hours of Saturday, pointing to a sharp shift in betting activity immediately prior to the public announcement was made.
"That trade has all the characteristics of a bet based on confidential knowledge," stated a financial reform advocate.
Several of other traders also earned tens of thousands of dollars from predicting the capture.
Legal Questions Emerges
Politicians are starting to take note.
A bill presented on Monday aims to prohibit public officials from participating on prediction markets if they have "material nonpublic information" related to a wager.
Market Background
Prediction markets have surged in popularity in the past few years, with users able to predict everything from sports outcomes to politics.
The industry were examined under the previous administration. However it has experienced less resistance during the Trump presidency.
Using confidential knowledge is a crime in the stock market, but there are more ambiguous rules in the forecasting arena.
A company executive for another major platform said their site "has clear rules against trading on insider information of any form."
