An Prediction Market User Earned $436,000 on Wagers on Venezuela's Political Shift.
A bettor profited close to $500,000 by predicting the removal of the Venezuelan leader shortly prior to it was officially announced, leading to inquiries about potential gains made from inside knowledge of the event.
Changing Odds in Wagers
Wagers on Polymarket, a blockchain-based service, that the leader would be removed from office by the close of the month increased in the time leading up to Donald Trump announced on the weekend that the president had been taken into custody.
One account, which became a member in December and made four bets, all on Venezuela, profited a total of $nearly half a million from a modest bet of over $32,000.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Odds Fluctuate Before News Break
Trading information shows that traders estimated the likelihood of a political change at just a low 6.5 percent in the midday period of the prior Friday.
However the odds had increased to eleven percent by late Friday night and skyrocketed in the morning of January 3rd, suggesting a rapid movement in positions just before the public announcement was made.
"That trade has all the hallmarks of a trade based on non-public details," said an industry expert.
Several of other individuals also earned tens of thousands of dollars from bets on the same outcome.
Political Attention Emerges
Politicians are starting to take note.
A bill presented on Monday aims to prohibit government employees from participating on forecasting platforms if they have "insider details" related to a market.
The Prediction Market Landscape
Prediction markets have grown significantly in the past few years, with users able to wager on everything from elections to politics.
The industry faced scrutiny under the last presidential term. But it has experienced less resistance during the current presidency.
Trading on insider information is against the law in the stock market, but there are fewer regulations in the event betting space.
An official representative for a competing service said their site "has clear rules against trading on insider information of any form."
