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A bettor profited close to $500,000 on the ouster of Venezuela's president shortly prior to it was officially announced, raising questions about the possibility of profiting from non-public details of the event.

Sudden Shift in Predictions

Wagers on Polymarket, a blockchain-based service, that the Venezuelan president would be out of power by the end of January surged in the hours before former President Trump announced on January 3rd that the Venezuelan leader had been seized.

A particular user, which joined the platform recently and made four bets, all on political events in Venezuela, earned over $436,000 from a initial bet of over $32,000.

It remains unclear. This unidentified trader had only a string of letters and numbers for identification.

Probability Spikes Before News Break

Market statistics shows that traders put the odds of Maduro's exit at just a low 6.5 percent in the midday period of the prior Friday.

However these probabilities had climbed to over 10% by late Friday night and spiked dramatically in the morning of Saturday, pointing to a sharp shift in market sentiment right before the social media post was made.

"That trade has all the signs of a transaction based on inside information," commented a financial reform advocate.

A small number of other platform users also earned significant sums from similar wagers.

Regulatory Scrutiny Emerges

Some lawmakers are beginning to pay attention.

Proposed legislation put forward on Monday seeks to ban public officials from making trades on forecasting platforms if they have "material nonpublic information" related to a market.

Industry Context

Forecasting platforms have surged in popularity in recent years, with users able to predict everything from sports to current affairs.

The industry encountered regulatory challenges under the Biden administration. However it has received a warmer welcome during the Trump presidency.

Trading on insider information is a crime in the securities markets, but there are fewer regulations in the prediction market space.

An official representative for a competing service said their site "has clear rules against insider trading of any form."