An Prediction Market User Made $436K on Bets Predicting Venezuela's Political Shift.
A trader made nearly half a million dollars from wagers on the downfall of Venezuela's president immediately preceding it was officially announced, raising questions about whether someone profited from non-public details of the event.
Changing Odds in Predictions
Wagers on Polymarket, a crypto-powered platform, that Nicolás Maduro would be no longer in control by the close of the month rose in the hours before former President Trump stated on Saturday that the Venezuelan leader had been taken into custody.
A particular user, which became a member last month and took four positions, all on political events in Venezuela, earned over $nearly half a million from a modest bet of over $32,000.
The identity is unknown. The anonymous account had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Trading information shows that users assessed the probability of Maduro's exit at just 6.5% in the midday period of the Friday before the event.
Yet the odds had jumped to eleven percent by late Friday night and spiked dramatically in the first hours of January 3rd, indicating a sudden change in positions just before the public announcement was made.
"That trade has all the characteristics of a transaction based on confidential knowledge," said an industry expert.
A handful of other platform users also earned significant sums from predicting the capture.
Regulatory Scrutiny Emerges
Politicians are starting to take note.
A new rule introduced on Monday aims to prohibit federal workers from participating on forecasting platforms if they have "material nonpublic information" related to a market.
Market Background
Event-driven betting sites have grown significantly in the past few years, with participants able to bet on everything from elections to political events.
The industry faced scrutiny under the Biden administration. But it has received a warmer welcome during the current presidency.
Using confidential knowledge is against the law in the stock market, but there are fewer regulations in the forecasting arena.
A company executive for another major platform said their site "has clear rules against trading on insider information of any form."
