A Prediction Market User Earned $Nearly Half a Million from Bets Predicting Maduro's Downfall.
A bettor made nearly half a million dollars from wagers on the downfall of the Venezuelan leader immediately preceding it was publicly declared, leading to inquiries about potential gains made from inside knowledge of American actions.
Sudden Shift in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be out of power by the end of January surged in the hours before Donald Trump announced on the weekend that Maduro had been taken into custody.
One account, which became a member recently and placed four wagers, all on the Venezuelan situation, made more than $nearly half a million from a starting bet of over $32,000.
It remains unclear. The user had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Trading information shows that users estimated the likelihood of Maduro's exit at just under 7% in the late afternoon of the Friday before the event.
Yet the odds had climbed to over 10% by the end of the day and surged in the early hours of January 3rd, pointing to a sharp shift in betting activity immediately prior to the public announcement was made.
"This particular bet has all the characteristics of a trade based on non-public details," stated a financial reform advocate.
A handful of other traders also profited significant sums from bets on the same outcome.
Legal Questions Intensifies
Elected officials are beginning to pay attention.
A new rule presented on Monday would prevent government employees from making trades on forecasting platforms if they have "insider details" related to a wager.
Market Background
Prediction markets have become increasingly popular in the United States, with users able to wager on everything from sports to political events.
The industry were examined under the previous administration. But it has experienced less resistance during the Trump presidency.
Using confidential knowledge is a crime in the securities markets, but there are less oversight in the prediction market space.
An official representative for another major platform said their site "has clear rules against insider trading of any form."
