A Prediction Market Trader Earned $436,000 on Bets on Maduro's Downfall.
A trader made nearly half a million dollars from wagers on the downfall of Venezuela's president immediately preceding it was officially announced, sparking debate about whether someone profited from inside knowledge of American actions.
Sudden Shift in Wagers
Wagers on Polymarket, an online prediction market, that the leader would be out of power by the close of the month increased in the time leading up to former President Trump announced on Saturday that the Venezuelan leader had been taken into custody.
One account, which joined the platform recently and took four positions, all on Venezuela, earned over $nearly half a million from a initial bet of over $32,000.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Odds Fluctuate Before Public Statement
Market statistics shows that users assessed the probability of a political change at just under 7% in the afternoon of Friday, January 2nd.
Yet the market's assessment had jumped to over 10% by shortly before midnight and spiked dramatically in the first hours of Saturday, suggesting a sudden change in betting activity immediately prior to the public announcement was made.
"This specific wager has all the hallmarks of a trade based on confidential knowledge," said an industry expert.
A small number of other traders also made tens of thousands of dollars from bets on the same outcome.
Political Attention Intensifies
Some lawmakers are starting to take note.
A bill introduced on recently would prevent government employees from participating on forecasting platforms if they have "material nonpublic information" related to a wager.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in the United States, with traders able to predict everything from elections to current affairs.
The industry were examined under the Biden administration. But it has found a more favorable environment during the present political climate.
Trading on insider information is illegal in the traditional financial markets, but there are more ambiguous rules in the event betting industry.
An official representative for another major platform said their site "explicitly prohibits trading on insider information of any form."
