An Prediction Market User Profited $436,000 on Bets on the Ouster of Maduro.
An individual profited close to $500,000 by predicting the removal of Venezuela's president shortly prior to it was officially announced, sparking debate about whether someone profited from inside knowledge of the event.
Market Movement in Wagers
Predictions made on the forecasting site, a blockchain-based service, that the Venezuelan president would be removed from office by the close of the month increased in the time leading up to President Donald Trump stated on the weekend that Maduro had been seized.
A single trader, which joined the platform in December and placed four wagers, all on political events in Venezuela, earned over $436K from a modest bet of $32,537.
Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.
Market Signals Before Announcement
Trading information shows that participants assessed the probability of Maduro's exit at just 6.5% in the afternoon of the prior Friday.
But these probabilities had jumped to 11% by the end of the day and spiked dramatically in the morning of Saturday, indicating a rapid movement in positions immediately prior to the official statement was made.
"This specific wager has all the signs of a transaction based on confidential knowledge," said a financial reform advocate.
A handful of other platform users also profited significant sums from bets on the same outcome.
Political Attention Emerges
Politicians are starting to take note.
A new rule presented on Monday seeks to ban government employees from placing bets on forecasting platforms if they have "material nonpublic information" related to a wager.
Market Background
Event-driven betting sites have grown significantly in the past few years, with traders able to wager on everything from elections to politics.
This sector faced scrutiny under the previous administration. However it has found a more favorable environment during the present political climate.
Using confidential knowledge is illegal in the traditional financial markets, but there are less oversight in the forecasting industry.
A company executive for a competing service said their site "has clear rules against trading on insider information of any form."
