A Prediction Market User Profited $436,000 on Wagers on Venezuela's Political Shift.
A trader earned a substantial sum on the ouster 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
Bets placed on the crypto-platform, a crypto-powered platform, that the Venezuelan president would be out of power by the end of January increased in the time leading up to Donald Trump stated on the weekend that the Venezuelan leader had been apprehended.
A single trader, which registered on the site recently and took four positions, all on political events in Venezuela, earned over $436,000 from a modest bet of $32,537.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Odds Fluctuate Before Announcement
Trading information shows that traders put the odds of the president's removal at just under 7% in the afternoon of Friday, January 2nd.
Yet the odds had increased to eleven percent by late Friday night and spiked dramatically in the first hours of the next day, suggesting a sharp shift in positions immediately prior to the public announcement was made.
"This specific wager has all the signs of a bet based on inside information," said Dennis Kelleher.
A small number of other platform users also profited tens of thousands of dollars from predicting the capture.
Political Attention Emerges
Politicians are beginning to pay attention.
Proposed legislation presented on Monday seeks to ban government employees from participating on prediction markets if they have "confidential government knowledge" related to a bet.
The Prediction Market Landscape
Event-driven betting sites have become increasingly popular in the past few years, with users able to predict everything from sports to political events.
Prediction markets faced scrutiny under the last presidential term. However it has experienced less resistance during the present political climate.
Using confidential knowledge is against the law in the securities markets, but there are more ambiguous rules in the prediction market space.
A spokesperson for a competing service said their site "strictly forbids insider trading of any form."
