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A bettor profited close to $500,000 from wagers on the downfall of Venezuela's president immediately preceding it was made public, raising questions about the possibility of profiting from confidential information of the event.

Market Movement in Predictions

Bets placed on the crypto-platform, a blockchain-based service, that the Venezuelan president would be out of power by the month's conclusion rose in the hours before former President Trump stated on Saturday that the president had been taken into custody.

A particular user, which joined the platform last month and made four bets, all on political events in Venezuela, earned over $nearly half a million from a starting bet of $32,537.

Who placed the bet is a mystery. The user had only a string of letters and numbers for identification.

Probability Spikes Before Public Statement

Market statistics shows that users put the odds of the president's removal at just a low 6.5 percent in the midday period of Friday, January 2nd.

But the market's assessment had increased to over 10% by the end of the day and surged in the morning of January 3rd, suggesting a sudden change in positions immediately prior to the social media post was made.

"This specific wager has all the hallmarks of a bet based on confidential knowledge," said a financial reform advocate.

A small number of other traders also profited significant sums from similar wagers.

Regulatory Scrutiny Grows

Politicians are beginning to pay attention.

A bill introduced on the start of the week seeks to ban government employees from participating on forecasting platforms if they have "insider details" related to a market.

Market Background

Forecasting platforms have become increasingly popular in the past few years, with participants able to wager on everything from sports outcomes to political events.

Prediction markets were examined under the last presidential term. Yet it has experienced less resistance during the current presidency.

Using confidential knowledge is a crime in the traditional financial markets, but there are less oversight in the forecasting space.

A spokesperson for another major platform said their site "explicitly prohibits trading on insider information of any form."