An Prediction Market User Earned $436K from Bets Predicting Maduro's Downfall.
A trader profited close to $500,000 on the ouster of the Venezuelan leader just before it was officially announced, sparking debate about potential gains made from non-public details of American actions.
Changing Odds in Forecasts
Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be no longer in control by the end of January surged in the hours before Donald Trump declared on Saturday that the president had been taken into custody.
A particular user, which became a member recently and took four positions, all on Venezuela, made more than $436,000 from a starting bet of $32.5K.
The identity is unknown. The user had only a string of letters and numbers for identification.
Market Signals Before News Break
Platform data shows that traders estimated the likelihood of a political change at just under 7% in the afternoon of Friday, January 2nd.
But the odds had jumped to eleven percent by the end of the day and skyrocketed in the morning of Saturday, indicating a sharp shift in betting activity right before the public announcement was made.
"That trade has all the hallmarks of a transaction based on inside information," stated Dennis Kelleher.
A small number of other individuals also profited tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Intensifies
Some lawmakers are beginning to pay attention.
A bill put forward on the start of the week seeks to ban government employees from placing bets on prediction markets if they have "insider details" related to a market.
Industry Context
Prediction markets have surged in popularity in recent years, with users able to wager on everything from sports outcomes to current affairs.
The industry were examined under the previous administration. But it has found a more favorable environment during the Trump presidency.
Trading on insider information is a crime in the stock market, but there are fewer regulations in the prediction market arena.
A spokesperson for another major platform said their site "strictly forbids insider trading of any form."
