An Prediction Market Trader Made $436K on Wagers Predicting Maduro's Downfall.

A trader made nearly half a million dollars from wagers on the downfall of the Venezuelan leader immediately preceding it was publicly declared, leading to inquiries about whether someone profited from inside knowledge of the US operation.

Changing Odds in Predictions

Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be no longer in control by the month's conclusion increased in the period preceding President Donald Trump announced on Saturday that the president had been seized.

A particular user, which became a member recently and made four bets, all on political events in Venezuela, profited a total of $436K from a starting bet of $32.5K.

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

Probability Spikes Before News Break

Market statistics shows that users put the odds of Maduro's exit at just a low 6.5 percent in the afternoon of Friday, January 2nd.

Yet these probabilities had climbed to 11% by the end of the day and skyrocketed in the early hours of Saturday, indicating a sharp shift in betting activity right before the social media post was made.

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

Several of other traders also earned large payouts from predicting the capture.

Regulatory Scrutiny Grows

Elected officials are beginning to pay attention.

Proposed legislation put forward on recently aims to prohibit public officials from participating on prediction markets if they have "material nonpublic information" related to a bet.

Market Background

Prediction markets have become increasingly popular in the United States, with users able to bet on everything from elections to political events.

This sector faced scrutiny under the previous administration. But it has received a warmer welcome during the Trump presidency.

Using confidential knowledge is a crime in the stock market, but there are less oversight in the prediction market arena.

An official representative for another major platform said their site "explicitly prohibits trading on insider information of any form."