A trader earned a substantial sum on the ouster of Venezuela's president immediately preceding it was publicly declared, leading to inquiries about the possibility of profiting from inside knowledge of American actions.
Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be no longer in control by the end of January increased in the period preceding President Donald Trump stated on January 3rd that the president had been seized.
A particular user, which registered on the site recently and placed four wagers, all on Venezuela, made more than $436,000 from a initial bet of $32,537.
Who placed the bet is a mystery. This unidentified trader had only a string of letters and numbers for identification.
Market statistics shows that traders estimated the likelihood of the president's removal at just under 7% in the afternoon of the Friday before the event.
However the odds had increased to 11% by late Friday night and surged in the early hours of Saturday, pointing to a sudden change in betting activity right before the official statement was made.
"This specific wager has all the characteristics of a trade based on confidential knowledge," commented an industry expert.
Several of other platform users also earned large payouts from similar wagers.
Elected officials are growing concerned.
Proposed legislation put forward on recently seeks to ban government employees from participating on prediction markets if they have "insider details" related to a bet.
Prediction markets have grown significantly in the United States, with traders able to wager on everything from sports to politics.
The industry were examined under the previous administration. However it has experienced less resistance during the current presidency.
Trading on insider information is illegal in the securities markets, but there are fewer regulations in the forecasting space.
A spokesperson for a competing service said their site "strictly forbids insider trading of any form."
