A Prediction Market User Profited $436,000 on Bets on the Ouster of Maduro.
An individual profited close to $500,000 on the ouster of Nicolás Maduro immediately preceding it was made public, raising questions about whether someone profited from inside knowledge of the event.
Market Movement in Predictions
Bets placed on the crypto-platform, an online prediction market, that the leader would be no longer in control by the close of the month increased in the hours before President Donald Trump declared on the weekend that the president had been seized.
A particular user, which joined the platform recently and made four bets, all on political events in Venezuela, profited a total of $436,000 from a starting bet of over $32,000.
The identity is unknown. The anonymous account had only a blockchain identifier for identification.
Market Signals Before News Break
Trading information shows that participants put the odds of a political change at just under 7% in the afternoon of the prior Friday.
However these probabilities had jumped to 11% by shortly before midnight and skyrocketed in the early hours of the next day, pointing to a rapid movement in positions immediately prior to the social media post was made.
"That trade has all the signs of a bet based on confidential knowledge," commented an industry expert.
Several of other traders also earned tens of thousands of dollars from similar wagers.
Legal Questions Emerges
Politicians are starting to take note.
A new rule introduced on Monday aims to prohibit public officials from making trades on prediction markets if they have "material nonpublic information" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have surged in popularity in the United States, with participants able to bet on everything from elections to politics.
Prediction markets faced scrutiny under the previous administration. Yet it has found a more favorable environment during the current presidency.
Insider trading is illegal in the securities markets, but there are less oversight in the prediction market arena.
An official representative for another major platform said their site "strictly forbids such activities of any form."
