An Prediction Market User Profited $436,000 on Bets Predicting Maduro's Downfall.
A trader profited close to $500,000 on the ouster of the Venezuelan leader immediately preceding it was publicly declared, raising questions about whether someone profited from confidential information of American actions.
Changing Odds in Forecasts
Wagers on Polymarket, an online prediction market, that the leader would be removed from office by the close of the month surged in the period preceding former President Trump announced on the weekend that Maduro had been taken into custody.
One account, which registered on the site last month and took four positions, all on Venezuela, made more than $436,000 from a initial bet of $32.5K.
Who placed the bet is a mystery. The anonymous account had only a cryptographic address for identification.
Market Signals Before Public Statement
Platform data shows that users put the odds of Maduro's exit at just 6.5% in the midday period of Friday, January 2nd.
However these probabilities had increased to over 10% by shortly before midnight and surged in the morning of the next day, suggesting a sharp shift in positions right before the social media post was made.
"This particular bet has all the characteristics of a transaction based on inside information," said a financial reform advocate.
Several of other platform users also made significant sums from similar wagers.
Legal Questions Intensifies
Elected officials are starting to take note.
A bill put forward on recently aims to prohibit public officials from participating on prediction markets if they have "material nonpublic information" related to a market.
The Prediction Market Landscape
Forecasting platforms have grown significantly in recent years, with users able to bet on everything from sports to politics.
This sector faced scrutiny under the Biden administration. However it has received a warmer welcome during the present political climate.
Using confidential knowledge is against the law in the traditional financial markets, but there are less oversight in the prediction market arena.
A spokesperson for another major platform said their site "strictly forbids such activities of any form."
