An Forecasting Platform Trader Earned $436K from Bets Predicting Maduro's Downfall.
A bettor made nearly half a million dollars from wagers on the downfall of Nicolás Maduro just before it was publicly declared, raising questions about the possibility of profiting from non-public details of the US operation.
Changing Odds in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be out of power by the close of the month surged in the hours before former President Trump declared on the weekend that the Venezuelan leader had been taken into custody.
One account, which joined the platform in December and placed four wagers, all on Venezuela, earned over $nearly half a million from a modest bet of $32.5K.
Who placed the bet is a mystery. The user had only a blockchain identifier for identification.
Odds Fluctuate Before Announcement
Trading information shows that traders estimated the likelihood of Maduro's exit at just 6.5% in the afternoon of the prior Friday.
Yet the odds had increased to 11% by late Friday night and spiked dramatically in the early hours of January 3rd, indicating a rapid movement in market sentiment right before the social media post was made.
"This particular bet has all the hallmarks of a trade based on inside information," said a financial reform advocate.
A handful of other individuals also profited tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Grows
Some lawmakers are starting to take note.
A new rule put forward on the start of the week would prevent public officials from participating on forecasting platforms if they have "material nonpublic information" related to a wager.
Market Background
Forecasting platforms have surged in popularity in the past few years, with participants able to bet on everything from elections to politics.
The industry encountered regulatory challenges under the previous administration. But it has found a more favorable environment during the Trump presidency.
Trading on insider information is illegal in the stock market, but there are less oversight in the event betting arena.
A company executive for another major platform said their site "explicitly prohibits insider trading of any form."