A Prediction Market Participant Made $436K from Bets Predicting Venezuela's Political Shift.

A smartphone screen displays a prediction market application logo.

A trader made nearly half a million dollars from wagers on the downfall of the Venezuelan leader just before it was officially announced, leading to inquiries about potential gains made from non-public details of the US operation.

Market Movement in Forecasts

Predictions made on the forecasting site, a blockchain-based service, that Nicolás Maduro would be no longer in control by the month's conclusion rose in the hours before Donald Trump announced on January 3rd that the Venezuelan leader had been seized.

A particular user, which joined the platform in December and made four bets, all on political events in Venezuela, made more than $436,000 from a starting bet of $32.5K.

It remains unclear. The anonymous account had only a blockchain identifier for identification.

Market Signals Before News Break

Platform data shows that traders put the odds of Maduro's exit at just a low 6.5 percent in the late afternoon of the Friday before the event.

Yet these probabilities had increased to 11% by shortly before midnight and surged in the first hours of January 3rd, pointing to a sharp shift in betting activity just before the official statement was made.

"This specific wager has all the characteristics of a transaction based on inside information," commented Dennis Kelleher.

A handful of other traders also earned significant sums from similar wagers.

Regulatory Scrutiny Intensifies

Politicians are starting to take note.

A new rule presented on the start of the week seeks to ban federal workers from making trades on prediction markets if they have "material nonpublic information" related to a bet.