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A trader profited close to $500,000 on the ouster of the Venezuelan leader shortly prior to it was officially announced, raising questions about whether someone profited from inside knowledge of American actions.

Sudden Shift in Predictions

Predictions made on the forecasting site, an online prediction market, that the Venezuelan president would be out of power by the end of January increased in the hours before former President Trump declared on Saturday that the Venezuelan leader had been seized.

One account, which registered on the site in December and placed four wagers, all on political events in Venezuela, profited a total of $436K from a initial bet of $32.5K.

Who placed the bet is a mystery. This unidentified trader had only a blockchain identifier for identification.

Probability Spikes Before Announcement

Market statistics shows that users assessed the probability of Maduro's exit at just under 7% in the afternoon of Friday, January 2nd.

But these probabilities had increased to over 10% by the end of the day and spiked dramatically in the morning of the next day, suggesting a sharp shift in market sentiment immediately prior to the official statement was made.

"This specific wager has all the hallmarks of a transaction based on confidential knowledge," stated Dennis Kelleher.

Several of other individuals also made significant sums from bets on the same outcome.

Regulatory Scrutiny Emerges

Elected officials are growing concerned.

A new rule put forward on Monday seeks to ban government employees from placing bets on prediction markets if they have "material nonpublic information" related to a wager.

Market Background

Prediction markets have grown significantly in the past few years, with traders able to bet on everything from sports outcomes to political events.

The industry faced scrutiny under the Biden administration. But it has received a warmer welcome during the current presidency.

Using confidential knowledge is a crime in the securities markets, but there are fewer regulations in the prediction market arena.

A company executive for a competing service said their site "strictly forbids trading on insider information of any form."