An Forecasting Platform User Made $436,000 on Bets on Maduro's Downfall.
A trader made nearly half a million dollars by predicting the removal of Nicolás Maduro immediately preceding it was officially announced, raising questions about potential gains made from confidential information of the event.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that Nicolás Maduro would be out of power by the close of the month rose in the period preceding Donald Trump stated on the weekend that the Venezuelan leader had been seized.
A single trader, which registered on the site in December and made four bets, all on political events in Venezuela, made more than $nearly half a million from a initial bet of $32,537.
The identity is unknown. The anonymous account had only a string of letters and numbers for identification.
Market Signals Before Announcement
Market statistics shows that users assessed the probability of the president's removal at just under 7% in the late afternoon of Friday, January 2nd.
However these probabilities had climbed to over 10% by shortly before midnight and skyrocketed in the first hours of Saturday, pointing to a sudden change in market sentiment right before the public announcement was made.
"That trade has all the hallmarks of a trade based on non-public details," said Dennis Kelleher.
Several of other platform users also earned large payouts from predicting the capture.
Legal Questions Intensifies
Some lawmakers are starting to take note.
A new rule put forward on Monday seeks to ban public officials from making trades on prediction markets if they have "confidential government knowledge" related to a bet.
The Prediction Market Landscape
Event-driven betting sites have grown significantly in recent years, with participants able to wager on everything from elections to current affairs.
Prediction markets faced scrutiny under the Biden administration. Yet it has found a more favorable environment during the current presidency.
Using confidential knowledge is against the law in the stock market, but there are fewer regulations in the event betting arena.
An official representative for a competing service said their site "strictly forbids insider trading of any form."
