A Prediction Market User Made $436,000 on Wagers on Venezuela's Political Shift.
A bettor earned a substantial sum on the ouster of the Venezuelan leader immediately preceding it was officially announced, leading to inquiries about potential gains made from non-public details of the event.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be out of power by the end of January surged in the hours before President Donald Trump announced on Saturday that the president had been seized.
A single trader, which became a member recently and made four bets, all on political events in Venezuela, earned over $nearly half a million from a starting bet of $32,537.
Who placed the bet is a mystery. The anonymous account had only a blockchain identifier for identification.
Market Signals Before Public Statement
Platform data shows that participants estimated the likelihood of the president's removal at just a low 6.5 percent in the midday period of the prior Friday.
Yet the odds had climbed to eleven percent by late Friday night and skyrocketed in the morning of Saturday, suggesting a sudden change in betting activity just before the social media post was made.
"This specific wager has all the characteristics of a transaction based on non-public details," commented Dennis Kelleher.
Several of other traders also earned large payouts from predicting the capture.
Regulatory Scrutiny Grows
Some lawmakers are growing concerned.
Proposed legislation presented on the start of the week aims to prohibit public officials from participating on forecasting platforms if they have "confidential government knowledge" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have surged in popularity in the past few years, with users able to bet on everything from sports to current affairs.
This sector encountered regulatory challenges under the last presidential term. However it has found a more favorable environment during the Trump presidency.
Insider trading is a crime in the traditional financial markets, but there are more ambiguous rules in the event betting arena.
A company executive for a competing service said their site "has clear rules against such activities of any form."
