A Prediction Market Trader Made $436K on Bets on Maduro's Downfall.
A trader made nearly half a million dollars on the ouster of the Venezuelan leader shortly prior to it was publicly declared, leading to inquiries about whether someone profited from confidential information of the event.
Sudden Shift in Predictions
Wagers on Polymarket, an online prediction market, that the leader would be out of power by the month's conclusion rose in the time leading up to former President Trump announced on Saturday that the president had been taken into custody.
One account, which joined the platform last month and made four bets, all on the Venezuelan situation, made more than $436,000 from a initial bet of over $32,000.
Who placed the bet is a mystery. This unidentified trader had only a string of letters and numbers for identification.
Odds Fluctuate Before Public Statement
Market statistics shows that participants estimated the likelihood of Maduro's exit at just a low 6.5 percent in the midday period of Friday, January 2nd.
However the market's assessment had increased to 11% by the end of the day and surged in the first hours of Saturday, pointing to a rapid movement in positions right before the social media post was made.
"That trade has all the characteristics of a trade based on inside information," said a financial reform advocate.
A small number of other traders also made significant sums from similar wagers.
Regulatory Scrutiny Intensifies
Politicians are beginning to pay attention.
Proposed legislation put forward on recently aims to prohibit federal workers from making trades on prediction markets if they have "material nonpublic information" related to a wager.
Industry Context
Event-driven betting sites have surged in popularity in the past few years, with users able to bet on everything from elections to current affairs.
The industry were examined under the previous administration. But it has experienced less resistance during the Trump presidency.
Trading on insider information is against the law in the traditional financial markets, but there are less oversight in the event betting industry.
A spokesperson for another major platform said their site "explicitly prohibits insider trading of any form."
