A Prediction Market User Made $436,000 on Bets Predicting Venezuela's Political Shift.
An individual made nearly half a million dollars on the ouster of the Venezuelan leader just before it was made public, leading to inquiries about the possibility of profiting from inside knowledge of the US operation.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that Nicolás Maduro would be removed from office by the end of January rose in the period preceding former President Trump stated on the weekend that the Venezuelan leader had been seized.
A particular user, which became a member last month 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.
Market Signals Before News Break
Market statistics shows that participants put the odds of the president's removal at just a low 6.5 percent in the afternoon of Friday, January 2nd.
Yet the odds had jumped to eleven percent by late Friday night and skyrocketed in the early hours of January 3rd, indicating a sharp shift in market sentiment just before the public announcement was made.
"This particular bet has all the characteristics of a bet based on non-public details," said an industry expert.
Several of other traders also earned tens of thousands of dollars from bets on the same outcome.
Legal Questions Intensifies
Some lawmakers are starting to take note.
A bill put forward on the start of the week seeks to ban federal workers from placing bets on prediction markets if they have "insider details" related to a market.
Market Background
Prediction markets have grown significantly in the United States, with traders able to wager on everything from sports outcomes to politics.
This sector faced scrutiny under the Biden administration. However it has received a warmer welcome during the present political climate.
Using confidential knowledge is illegal in the stock market, but there are fewer regulations in the event betting industry.
A company executive for a competing service said their site "explicitly prohibits trading on insider information of any form."
