A Forecasting Platform User Profited $436,000 on Wagers Predicting Maduro's Downfall.
A trader earned a substantial sum from wagers on the downfall of the Venezuelan leader immediately preceding it was made public, raising questions about whether someone profited from confidential information of the event.
Sudden Shift in Wagers
Predictions made on the forecasting site, a blockchain-based service, that the leader would be out of power by the end of January increased in the time leading up to former President Trump stated on January 3rd that Maduro had been apprehended.
A particular user, which registered on the site in December and made four bets, all on political events in Venezuela, made more than $436K from a initial bet of over $32,000.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Odds Fluctuate Before News Break
Market statistics shows that traders assessed the probability of the president's removal at just 6.5% in the midday period of Friday, January 2nd.
But the odds had jumped to 11% by the end of the day and spiked dramatically in the morning of January 3rd, indicating a rapid movement in positions just before the social media post was made.
"That trade has all the signs of a trade based on confidential knowledge," commented Dennis Kelleher.
Several of other traders also made significant sums from predicting the capture.
Legal Questions Grows
Elected officials are starting to take note.
Proposed legislation put forward on the start of the week seeks to ban public officials from placing bets on prediction markets if they have "insider details" related to a market.
Market Background
Event-driven betting sites have become increasingly popular in the past few years, with traders able to bet on everything from sports outcomes to current affairs.
Prediction markets faced scrutiny under the previous administration. However it has found a more favorable environment during the current presidency.
Trading on insider information is illegal in the stock market, but there are less oversight in the forecasting space.
A spokesperson for a competing service said their site "strictly forbids insider trading of any form."
