An Prediction Market User Made $436,000 from Wagers Predicting Maduro's Downfall.
An individual earned a substantial sum on the ouster of the Venezuelan leader shortly prior to it was officially announced, sparking debate about the possibility of profiting from inside knowledge of the event.
Market Movement in Wagers
Bets placed on the crypto-platform, an online prediction market, that Nicolás Maduro would be removed from office by the close of the month increased in the hours before Donald Trump declared on the weekend that the Venezuelan leader had been apprehended.
One account, which registered on the site recently and made four bets, all on Venezuela, profited a total of $436K from a starting bet of $32,537.
The identity is unknown. The user had only a cryptographic address for identification.
Probability Spikes Before Public Statement
Trading information shows that participants estimated the likelihood of the president's removal at just 6.5% in the late afternoon of Friday, January 2nd.
But the market's assessment had jumped to over 10% by late Friday night and surged in the first hours of January 3rd, pointing to a sharp shift in betting activity right before the public announcement was made.
"This particular bet has all the signs of a transaction based on inside information," commented a financial reform advocate.
A handful of other individuals also made significant sums from similar wagers.
Legal Questions Emerges
Elected officials are starting to take note.
Proposed legislation introduced on recently would prevent federal workers from placing bets on prediction markets if they have "material nonpublic information" related to a bet.
Market Background
Prediction markets have become increasingly popular in the past few years, with users able to predict everything from elections to political events.
Prediction markets were examined under the last presidential term. However it has received a warmer welcome during the present political climate.
Trading on insider information is illegal in the stock market, but there are fewer regulations in the prediction market arena.
An official representative for another major platform said their site "strictly forbids such activities of any form."
