A Prediction Market Participant Made $Nearly Half a Million on Bets Predicting the Ouster of Maduro.
A trader made nearly half a million dollars on the ouster of Venezuela's president immediately preceding it was officially announced, sparking debate about the possibility of profiting from non-public details of the US operation.
Market Movement in Wagers
Wagers on Polymarket, a blockchain-based service, that the leader would be removed from office by the close of the month rose in the hours before President Donald Trump declared on the weekend that the Venezuelan leader had been taken into custody.
A particular user, which registered on the site recently and made four bets, all on Venezuela, earned over $nearly half a million from a initial bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a string of letters and numbers for identification.
Odds Fluctuate Before Announcement
Market statistics shows that participants estimated the likelihood of a political change at just 6.5% in the late afternoon of Friday, January 2nd.
However the odds had jumped to over 10% by late Friday night and spiked dramatically in the first hours of Saturday, indicating a rapid movement in positions just before the public announcement was made.
"This specific wager has all the signs of a bet based on confidential knowledge," commented Dennis Kelleher.
A handful of other individuals also earned large payouts from bets on the same outcome.
Legal Questions Intensifies
Elected officials are growing concerned.
Proposed legislation put forward on recently seeks to ban public officials from participating on prediction markets if they have "confidential government knowledge" related to a market.
Market Background
Prediction markets have surged in popularity in recent years, with participants able to predict everything from elections to political events.
Prediction markets were examined under the last presidential term. But it has received a warmer welcome during the current presidency.
Using confidential knowledge is against the law in the traditional financial markets, but there are fewer regulations in the event betting arena.
A company executive for a competing service said their site "explicitly prohibits insider trading of any form."
