An Prediction Market Trader Earned $436K from Wagers Predicting Maduro's Downfall.
A bettor profited close to $500,000 from wagers on the downfall of the Venezuelan leader just before it was officially announced, sparking debate about the possibility of profiting from confidential information of the event.
Changing Odds in Predictions
Predictions made on the forecasting site, a blockchain-based service, that Nicolás Maduro would be no longer in control by the month's conclusion increased in the time leading up to former President Trump declared on Saturday that Maduro had been apprehended.
One account, which became a member last month and made four bets, all on political events in Venezuela, earned over $nearly half a million from a starting bet of $32.5K.
The identity is unknown. The user had only a string of letters and numbers for identification.
Probability Spikes Before Announcement
Trading information shows that traders put the odds of Maduro's exit at just a low 6.5 percent in the midday period of Friday, January 2nd.
But these probabilities had jumped to 11% by the end of the day and skyrocketed in the morning of January 3rd, suggesting a sharp shift in betting activity right before the official statement was made.
"That trade has all the hallmarks of a transaction based on confidential knowledge," stated Dennis Kelleher.
Several of other traders also made large payouts from predicting the capture.
Regulatory Scrutiny Emerges
Some lawmakers are starting to take note.
A new rule introduced on Monday aims to prohibit government employees from placing bets on forecasting platforms if they have "insider details" related to a wager.
Market Background
Event-driven betting sites have become increasingly popular in the past few years, with participants able to bet on everything from sports outcomes to political events.
The industry were examined under the last presidential term. However it has received a warmer welcome during the current presidency.
Using confidential knowledge is a crime in the stock market, but there are more ambiguous rules in the event betting arena.
A company executive for a competing service said their site "strictly forbids trading on insider information of any form."
