An Forecasting Platform User Profited $Nearly Half a Million from Wagers on the Ouster of Maduro.
A trader made nearly half a million dollars on the ouster of Venezuela's president shortly prior to it was officially announced, raising questions about whether someone profited from non-public details of the US operation.
Changing Odds in Wagers
Wagers on Polymarket, an online prediction market, that the Venezuelan president would be out of power by the close of the month increased in the hours before former President Trump announced on January 3rd that the Venezuelan leader had been seized.
A single trader, which became a member last month and took four positions, all on political events in Venezuela, made more than $436,000 from a modest bet of over $32,000.
It remains unclear. The user had only a string of letters and numbers for identification.
Odds Fluctuate Before Public Statement
Trading information shows that users assessed the probability of the president's removal at just 6.5% in the late afternoon of Friday, January 2nd.
However the market's assessment had climbed to 11% by shortly before midnight and skyrocketed in the early hours of the next day, indicating a rapid movement in market sentiment right before the official statement was made.
"That trade has all the characteristics of a trade based on inside information," said Dennis Kelleher.
A small number of other traders also earned large payouts from similar wagers.
Legal Questions Intensifies
Some lawmakers are starting to take note.
A bill presented on the start of the week seeks to ban federal workers from participating on forecasting platforms if they have "insider details" related to a market.
Market Background
Prediction markets have grown significantly in recent years, with users able to bet on everything from elections to current affairs.
The industry encountered regulatory challenges under the Biden administration. But it has experienced less resistance during the current presidency.
Trading on insider information is a crime in the traditional financial markets, but there are more ambiguous rules in the event betting space.
A company executive for a competing service said their site "has clear rules against insider trading of any form."
