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A trader profited close to $500,000 on the ouster of the Venezuelan leader immediately preceding it was officially announced, leading to inquiries about whether someone profited from confidential information of the event.

Sudden Shift in Predictions

Predictions made on the forecasting site, a crypto-powered platform, that Nicolás Maduro would be no longer in control by the close of the month increased in the hours before former President Trump announced on Saturday that the president had been taken into custody.

One account, which joined the platform last month and placed four wagers, all on political events in Venezuela, made more than $436,000 from a starting bet of over $32,000.

The identity is unknown. The anonymous account had only a cryptographic address for identification.

Odds Fluctuate Before Public Statement

Trading information shows that participants estimated the likelihood of the president's removal at just under 7% in the afternoon of the Friday before the event.

But the odds had jumped to 11% by late Friday night and surged in the first hours of Saturday, pointing to a sharp shift in positions just before the official statement was made.

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

A small number of other platform users also profited large payouts from similar wagers.

Regulatory Scrutiny Emerges

Elected officials are growing concerned.

Proposed legislation presented on recently seeks to ban public officials from making trades on prediction markets if they have "confidential government knowledge" related to a wager.

The Prediction Market Landscape

Forecasting platforms have become increasingly popular in the past few years, with traders able to predict everything from sports to politics.

This sector faced scrutiny under the Biden administration. But it has found a more favorable environment during the present political climate.

Trading on insider information is a crime in the traditional financial markets, but there are fewer regulations in the event betting arena.

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