A Prediction Market User Made $Nearly Half a Million on Bets on Venezuela's Political Shift.
A bettor profited close to $500,000 on the ouster of the Venezuelan leader shortly prior to it was made public, sparking debate about whether someone profited from non-public details of American actions.
Market Movement in Forecasts
Wagers on Polymarket, a blockchain-based service, that the Venezuelan president would be out of power by the close of the month increased in the time leading up to Donald Trump declared on January 3rd that Maduro had been taken into custody.
A single trader, which joined the platform last month and made four bets, all on political events in Venezuela, earned over $nearly half a million from a modest bet of $32,537.
The identity is unknown. This unidentified trader had only a string of letters and numbers for identification.
Market Signals Before News Break
Trading information shows that users assessed the probability of a political change at just a low 6.5 percent in the late afternoon of the prior Friday.
But these probabilities had climbed to eleven percent by shortly before midnight and skyrocketed in the early hours of the next day, suggesting a rapid movement in positions right before the social media post was made.
"This particular bet has all the characteristics of a bet based on non-public details," said Dennis Kelleher.
A handful of other platform users also profited large payouts from similar wagers.
Political Attention Intensifies
Elected officials are growing concerned.
A bill put forward on the start of the week aims to prohibit public officials from participating on forecasting platforms if they have "confidential government knowledge" related to a market.
Market Background
Event-driven betting sites have surged in popularity in the past few years, with traders able to bet on everything from elections to politics.
This sector encountered regulatory challenges under the last presidential term. But it has received a warmer welcome during the Trump presidency.
Insider trading is against the law in the traditional financial markets, but there are less oversight in the prediction market space.
A company executive for a competing service said their site "strictly forbids insider trading of any form."