An Forecasting Platform User Earned $Nearly Half a Million on Bets on Venezuela's Political Shift.
A trader earned a substantial sum on the ouster of Venezuela's president just before it was publicly declared, sparking debate about whether someone profited from confidential information of the event.
Sudden Shift in Predictions
Bets placed on the crypto-platform, a blockchain-based service, that the leader would be removed from office by the month's conclusion increased in the hours before President Donald Trump announced on Saturday that the president had been apprehended.
A particular user, which registered on the site in December and placed four wagers, all on Venezuela, made more than $436,000 from a starting bet of over $32,000.
Who placed the bet is a mystery. The user had only a cryptographic address for identification.
Odds Fluctuate Before Announcement
Trading information shows that traders put the odds of a political change at just 6.5% in the late afternoon of the prior Friday.
But the odds had climbed to over 10% by shortly before midnight and surged in the morning of Saturday, suggesting a sharp shift in positions immediately prior to the public announcement was made.
"This specific wager has all the signs of a transaction based on non-public details," commented a financial reform advocate.
A small number of other platform users also profited tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Grows
Politicians are starting to take note.
Proposed legislation put forward on recently seeks to ban government employees from making trades on forecasting platforms if they have "confidential government knowledge" related to a bet.
Market Background
Forecasting platforms have grown significantly in the United States, with users able to wager on everything from sports to political events.
The industry were examined under the last presidential term. However it has found a more favorable environment during the Trump presidency.
Using confidential knowledge is a crime in the stock market, but there are less oversight in the event betting space.
A company executive for another major platform said their site "strictly forbids trading on insider information of any form."
