An Prediction Market Trader Made $Nearly Half a Million from Bets Predicting Venezuela's Political Shift.
A trader profited close to $500,000 from wagers on the downfall of Nicolás Maduro immediately preceding it was officially announced, raising questions about whether someone profited from confidential information of the event.
Market Movement in Wagers
Wagers on Polymarket, an online prediction market, that the leader would be no longer in control by the month's conclusion rose in the time leading up to President Donald Trump announced on January 3rd that the president had been taken into custody.
One account, which joined the platform recently and made four bets, all on the Venezuelan situation, profited a total of $nearly half a million from a starting bet of over $32,000.
The identity is unknown. The user had only a blockchain identifier for identification.
Market Signals Before News Break
Trading information shows that users assessed the probability of the president's removal at just 6.5% in the midday period of the prior Friday.
However these probabilities had jumped to over 10% by late Friday night and spiked dramatically in the early hours of the next day, suggesting a sudden change in market sentiment just before the public announcement was made.
"This specific wager has all the hallmarks of a bet based on inside information," said an industry expert.
A small number of other traders also profited significant sums from similar wagers.
Legal Questions Grows
Politicians are growing concerned.
A new rule put forward on the start of the week seeks to ban government employees from making trades on forecasting platforms if they have "confidential government knowledge" related to a wager.
Industry Context
Event-driven betting sites have grown significantly in the past few years, with participants able to wager on everything from elections to politics.
The industry faced scrutiny under the last presidential term. Yet it has found a more favorable environment during the Trump presidency.
Trading on insider information is illegal in the stock market, but there are less oversight in the event betting industry.
An official representative for Kalshi said their site "strictly forbids trading on insider information of any form."
