A Prediction Market User Earned $Nearly Half a Million from Wagers on the Ouster of Maduro.

Illustration of a prediction market app — A smartphone screen displays a prediction market application logo.

A bettor earned a substantial sum from wagers on the downfall of the Venezuelan leader just before it was officially announced, raising questions about whether someone profited from inside knowledge of the event.

Sudden Shift in Wagers

Bets placed on the crypto-platform, a blockchain-based service, that the leader would be out of power by the close of the month surged in the hours before President Donald Trump announced on January 3rd that the president had been seized.

A single trader, which joined the platform in December and placed four wagers, all on political events in Venezuela, earned over $436,000 from a starting bet of $32.5K.

The identity is unknown. The user had only a blockchain identifier for identification.

Probability Spikes Before News Break

Trading information shows that participants assessed the probability of a political change at just under 7% in the afternoon of the Friday before the event.

Yet the odds had climbed to 11% by late Friday night and skyrocketed in the morning of the next day, pointing to a sharp shift in betting activity just before the official statement was made.

"That trade has all the hallmarks of a bet based on inside information," commented a financial reform advocate.

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

Political Attention Intensifies

Politicians are starting to take note.

Proposed legislation put forward on recently seeks to ban federal workers from placing bets on prediction markets if they have "material nonpublic information" related to a market.