A Prediction Market Trader Earned $436,000 from Wagers Predicting Venezuela's Political Shift.

A bettor profited close to $500,000 on the ouster of the Venezuelan leader immediately preceding it was made public, raising questions about the possibility of profiting from confidential information of the event.

Changing Odds in Predictions

Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be removed from office by the close of the month surged in the hours before President Donald Trump declared on Saturday that the Venezuelan leader had been apprehended.

One account, which became a member last month and made four bets, all on political events in Venezuela, profited a total of $nearly half a million from a modest bet of $32,537.

The identity is unknown. This unidentified trader had only a string of letters and numbers for identification.

Probability Spikes Before Public Statement

Platform data shows that participants assessed the probability of a political change at just under 7% in the midday period of the Friday before the event.

However the odds had climbed to 11% by shortly before midnight and spiked dramatically in the morning of Saturday, suggesting a sudden change in betting activity just before the social media post was made.

"That trade has all the hallmarks of a trade based on confidential knowledge," stated a financial reform advocate.

Several of other traders also profited large payouts from similar wagers.

Regulatory Scrutiny Emerges

Elected officials are growing concerned.

A bill presented on the start of the week aims to prohibit public officials from participating on prediction markets if they have "confidential government knowledge" related to a market.

The Prediction Market Landscape

Event-driven betting sites have grown significantly in the United States, with traders able to bet on everything from elections to current affairs.

This sector were examined under the last presidential term. However it has experienced less resistance during the present political climate.

Trading on insider information is a crime in the traditional financial markets, but there are more ambiguous rules in the prediction market space.

A company executive for a competing service said their site "explicitly prohibits insider trading of any form."