A Prediction Market Trader Earned $436K on Bets Predicting Venezuela's Political Shift.
A bettor earned a substantial sum by predicting the removal of Venezuela's president just before it was publicly declared, sparking debate about whether someone profited from inside knowledge of the US operation.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that the leader would be no longer in control by the end of January surged in the time leading up to former President Trump announced on Saturday that Maduro had been taken into custody.
A particular user, which registered on the site in December and took four positions, all on the Venezuelan situation, profited a total of $nearly half a million from a modest bet of over $32,000.
The identity is unknown. The user had only a string of letters and numbers for identification.
Probability Spikes Before Public Statement
Trading information shows that traders put the odds of a political change at just under 7% in the late afternoon of Friday, January 2nd.
But the odds had climbed to eleven percent by the end of the day and skyrocketed in the first hours of January 3rd, suggesting a sudden change in market sentiment right before the social media post was made.
"This particular bet has all the hallmarks of a bet based on non-public details," stated Dennis Kelleher.
A handful of other traders also made large payouts from bets on the same outcome.
Political Attention Grows
Some lawmakers are beginning to pay attention.
A new rule presented on Monday aims to prohibit government employees from participating on prediction markets if they have "material nonpublic information" related to a wager.
Market Background
Prediction markets have grown significantly in the United States, with users able to wager on everything from sports to current affairs.
This sector faced scrutiny under the last presidential term. However it has received a warmer welcome during the present political climate.
Insider trading is against the law in the securities markets, but there are more ambiguous rules in the forecasting arena.
A company executive for another major platform said their site "explicitly prohibits insider trading of any form."
