An Prediction Market User Profited $Nearly Half a Million on Bets on Maduro's Downfall.
A bettor profited close to $500,000 from wagers on the downfall of Venezuela's president immediately preceding it was made public, leading to inquiries about whether someone profited from confidential information of the event.
Changing Odds in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be removed from office by the month's conclusion rose in the hours before President Donald Trump announced on Saturday that the Venezuelan leader had been taken into custody.
A particular user, which registered on the site in December and took four positions, all on the Venezuelan situation, earned over $nearly half a million from a initial bet of $32,537.
Who placed the bet is a mystery. The user had only a blockchain identifier for identification.
Odds Fluctuate Before Public Statement
Market statistics shows that participants assessed the probability of the president's removal at just a low 6.5 percent in the late afternoon of the prior Friday.
However these probabilities had climbed to 11% by the end of the day and spiked dramatically in the first hours of Saturday, suggesting a sudden change in positions just before the public announcement was made.
"This specific wager has all the characteristics of a trade based on non-public details," commented a financial reform advocate.
Several of other individuals also earned large payouts from similar wagers.
Legal Questions Intensifies
Some lawmakers are starting to take note.
Proposed legislation put forward on the start of the week aims to prohibit government employees from participating on forecasting platforms if they have "material nonpublic information" related to a bet.
Industry Context
Prediction markets have become increasingly popular in the United States, with participants able to bet on everything from sports outcomes to current affairs.
This sector encountered regulatory challenges under the previous administration. But it has received a warmer welcome during the current presidency.
Trading on insider information is against the law in the securities markets, but there are less oversight in the event betting space.
A spokesperson for a competing service said their site "has clear rules against trading on insider information of any form."