Mystery trader makes $526,000 windfall betting on Maduro’s ouster
Sign up now: Get ST's newsletters delivered to your inbox
The unknown trader made bets amounting to US$34,000 in the days leading up to Mr Nicolas Maduro’s capture.
PHOTO: REUTERS
Follow topic:
NEW YORK - An unknown trader has raked in a profit worth about US$410,000 (S$526,000) after betting that Venezuelan President Nicolas Maduro would be ousted from his position.
The trader’s account on Polymarket built up positions in contracts tied to Maduro’s removal on terms that implied long odds before the weekend raid.
Those wagers, which were worth about US$34,000 prior to Maduro’s capture, surged in value after news of the US military operation against the Venezuelan leader emerged, Polymarket data shows.
The mystery trade is likely to attract scrutiny from US lawmakers who have been pushing for stricter insider trading rules, including a bipartisan effort to potentially ban trading of stocks by lawmakers.
After news of the Maduro trades emerged on Jan 5, Democratic congressman Ritchie Torres said he plans to introduce a Bill this week that would bar elected officials, lawmakers and federal employees who could potentially access material non-public information from placing bets on prediction market platforms.
The anonymous account was created in December, with the trader buying up US$96 worth of contracts on Dec 27 that would pay off if the US invaded Venezuela by Jan 31. The trader then made several more similar bets in the following days.
Prediction markets like Polymarket offer tradable yes-or-no contracts that allow users to bet on a wide range of real-world events, ranging from outcomes across sports and entertainment to politics and the economy. When a contract priced at a few cents pays out at US$1, traders who have access to non-public information tied to such contracts can rake in massive profits within hours or days.
In September, Polymarket secured approval from the US Commodity Futures Trading Commission (CFTC) to relaunch its operations in the country, following its US$112 million acquisition of QCEX, a CFTC-licensed derivatives exchange and clearing house. The CFTC did not immediately respond to a request for comment on whether it was looking into trades related to Maduro’s capture.
Polymarket has previously faced scrutiny on potential insider trading on the platform. While Americans at present do not have access to the main betting platform, many traders use virtual private networks to get around the ban.
Polymarket did not immediately respond to a request for comment.
Major stock indexes jumped and oil prices gained earlier on Jan 5, while energy shares notched big gains after Maduro was captured by the US military.
In Venezuela, the country’s default-hit government bonds also surged, buoyed by expectations of a large and complex sovereign-debt restructuring. Bonds issued by the government and state oil company Petroleos de Venezuela, known as PDVSA, jumped as much as 10 cents on the dollar, or almost 30 per cent, as bullish investors swooped on the developments. REUTERS
