A Forecasting Platform User Made $Nearly Half a Million on Wagers on Maduro's Downfall.
A trader made nearly half a million dollars from wagers on the downfall of the Venezuelan leader just before it was made public, raising questions about potential gains made from inside knowledge of the event.
Sudden Shift in Predictions
Predictions made on the forecasting site, an online prediction market, that Nicolás Maduro would be out of power by the close of the month surged in the hours before President Donald Trump declared on Saturday that the Venezuelan leader had been seized.
A particular user, which registered on the site recently and made four bets, all on political events in Venezuela, earned over $nearly half a million from a initial bet of over $32,000.
The identity is unknown. The anonymous account had only a string of letters and numbers for identification.
Probability Spikes Before News Break
Trading information shows that traders estimated the likelihood of the president's removal at just a low 6.5 percent in the afternoon of Friday, January 2nd.
But these probabilities had increased to over 10% by shortly before midnight and skyrocketed in the morning of Saturday, pointing to a rapid movement in market sentiment just before the social media post was made.
"This particular bet has all the signs of a trade based on inside information," commented an industry expert.
A handful of other traders also earned tens of thousands of dollars from bets on the same outcome.
Regulatory Scrutiny Grows
Politicians are beginning to pay attention.
A bill introduced on Monday seeks to ban federal workers from placing bets on forecasting platforms if they have "insider details" related to a wager.
The Prediction Market Landscape
Forecasting platforms have grown significantly in the United States, with traders able to wager on everything from sports to political events.
Prediction markets encountered regulatory challenges under the last presidential term. However it has experienced less resistance during the Trump presidency.
Using confidential knowledge is against the law in the traditional financial markets, but there are more ambiguous rules in the forecasting industry.
A spokesperson for another major platform said their site "explicitly prohibits insider trading of any form."
