A Prediction Market Trader Made $436,000 on Bets on Maduro's Downfall.
An individual made nearly half a million dollars on the ouster of the Venezuelan leader just before it was publicly declared, raising questions about whether someone profited from confidential information of the US operation.
Sudden Shift in Forecasts
Predictions made on the forecasting site, a blockchain-based service, that the leader would be removed from office by the month's conclusion increased in the period preceding Donald Trump declared on the weekend that Maduro had been apprehended.
A single trader, which registered on the site last month and made four bets, all on Venezuela, made more than $436,000 from a starting bet of $32.5K.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Odds Fluctuate Before Public Statement
Trading information shows that users assessed the probability of the president's removal at just a low 6.5 percent in the late afternoon of the prior Friday.
However the market's assessment had climbed to eleven percent by late Friday night and surged in the first hours of the next day, pointing to a sudden change in positions immediately prior to the social media post was made.
"That trade has all the signs of a transaction based on confidential knowledge," said an industry expert.
A handful of other traders also earned tens of thousands of dollars from similar wagers.
Legal Questions Grows
Politicians are starting to take note.
A new rule introduced on Monday aims to prohibit federal workers from making trades on forecasting platforms if they have "insider details" related to a market.
Industry Context
Prediction markets have grown significantly in the United States, with participants able to bet on everything from elections to politics.
The industry encountered regulatory challenges under the previous administration. Yet it has found a more favorable environment during the present political climate.
Trading on insider information is against the law in the stock market, but there are more ambiguous rules in the forecasting space.
A company executive for another major platform said their site "explicitly prohibits trading on insider information of any form."
