An Prediction Market User Made $Nearly Half a Million from Wagers Predicting Venezuela's Political Shift.

An individual earned a substantial sum by predicting the removal of Venezuela's president immediately preceding it was officially announced, raising questions about potential gains made from confidential information of the event.

Market Movement in Wagers

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 time leading up to President Donald Trump stated on the weekend that the Venezuelan leader had been taken into custody.

A single trader, which joined the platform in December and took four positions, all on political events in Venezuela, made more than $436K from a starting bet of over $32,000.

It remains unclear. The anonymous account had only a string of letters and numbers for identification.

Odds Fluctuate Before Announcement

Market statistics shows that traders put the odds of a political change at just a low 6.5 percent in the midday period of the Friday before the event.

But the odds had jumped to 11% by the end of the day and surged in the first hours of the next day, suggesting a sudden change in market sentiment immediately prior to the social media post was made.

"This particular bet has all the characteristics of a trade based on non-public details," commented Dennis Kelleher.

Several of other traders also made tens of thousands of dollars from bets on the same outcome.

Legal Questions Grows

Some lawmakers are growing concerned.

A bill put forward on recently would prevent federal workers from participating on prediction markets if they have "confidential government knowledge" related to a bet.

The Prediction Market Landscape

Forecasting platforms have surged in popularity in the United States, with users able to wager on everything from sports to current affairs.

Prediction markets were examined under the previous administration. Yet it has found a more favorable environment during the current presidency.

Insider trading is illegal in the traditional financial markets, but there are fewer regulations in the event betting space.

A company executive for a competing service said their site "has clear rules against insider trading of any form."