A Prediction Market User Made $Nearly Half a Million on Bets on Venezuela's Political Shift.
A bettor made nearly half a million dollars by predicting the removal of Venezuela's president shortly prior to it was publicly declared, sparking debate about the possibility of profiting from non-public details of the US operation.
Changing Odds in Predictions
Predictions made on the forecasting site, a crypto-powered platform, that the Venezuelan president would be no longer in control by the close of the month rose in the hours before President Donald Trump announced on Saturday that the Venezuelan leader had been taken into custody.
A single trader, which joined the platform last month and placed four wagers, all on political events in Venezuela, made more than $436K from a initial bet of $32,537.
It remains unclear. The anonymous account had only a blockchain identifier for identification.
Probability Spikes Before News Break
Market statistics shows that users put the odds of a political change at just a low 6.5 percent in the late afternoon of Friday, January 2nd.
Yet these probabilities had jumped to 11% by shortly before midnight and surged in the first hours of the next day, suggesting a sharp shift in betting activity just before the public announcement was made.
"This particular bet has all the signs of a trade based on non-public details," said an industry expert.
A small number of other individuals also profited tens of thousands of dollars from similar wagers.
Political Attention Intensifies
Elected officials are beginning to pay attention.
Proposed legislation introduced on Monday aims to prohibit federal workers from making trades on prediction markets if they have "insider details" related to a wager.
Industry Context
Prediction markets have surged in popularity in the United States, with traders able to wager on everything from sports to current affairs.
This sector were examined under the last presidential term. However it has experienced less resistance during the Trump presidency.
Trading on insider information is a crime in the securities markets, but there are fewer regulations in the forecasting industry.
A company executive for a competing service said their site "has clear rules against such activities of any form."
