A trader earned a substantial sum from wagers on the downfall of the Venezuelan leader shortly prior to it was publicly declared, raising questions about whether someone profited from inside knowledge of American actions.
Bets placed on the crypto-platform, a crypto-powered platform, that the Venezuelan president would be no longer in control by the end of January increased in the time leading up to former President Trump announced on the weekend that the president had been taken into custody.
One account, which joined the platform in December and took four positions, all on Venezuela, profited a total of $nearly half a million from a initial bet of over $32,000.
The identity is unknown. The user had only a string of letters and numbers for identification.
Platform data shows that traders assessed the probability of a political change at just under 7% in the late afternoon of Friday, January 2nd.
Yet these probabilities had increased to 11% by the end of the day and spiked dramatically in the morning of Saturday, suggesting a sharp shift in positions right before the public announcement was made.
"This particular bet has all the signs of a transaction based on non-public details," commented an industry expert.
Several of other platform users also made significant sums from bets on the same outcome.
Some lawmakers are starting to take note.
A bill presented on the start of the week aims to prohibit public officials from participating on prediction markets if they have "material nonpublic information" related to a wager.
Event-driven betting sites have surged in popularity in the past few years, with participants able to predict everything from sports outcomes to political events.
The industry were examined under the Biden administration. Yet it has received a warmer welcome during the present political climate.
Trading on insider information is against the law in the securities markets, but there are more ambiguous rules in the prediction market industry.
A company executive for a competing service said their site "explicitly prohibits insider trading of any form."
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