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A trader profited close to $500,000 from wagers on the downfall of the Venezuelan leader immediately preceding it was publicly declared, raising questions about whether someone profited from non-public details of the US operation.

Sudden Shift in Forecasts

Bets placed on the crypto-platform, an online prediction market, that the Venezuelan president would be out of power by the end of January rose in the period preceding Donald Trump announced on January 3rd that the president had been seized.

A particular user, which registered on the site recently and took four positions, all on political events in Venezuela, made more than $436,000 from a modest bet of $32,537.

Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.

Odds Fluctuate Before Public Statement

Market statistics shows that users put the odds of Maduro's exit at just under 7% in the midday period of Friday, January 2nd.

However these probabilities had jumped to over 10% by late Friday night and skyrocketed in the morning of January 3rd, pointing to a sudden change in betting activity immediately prior to the public announcement was made.

"This particular bet has all the hallmarks of a transaction based on non-public details," said a financial reform advocate.

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

Legal Questions Grows

Elected officials are growing concerned.

Proposed legislation put forward on the start of the week would prevent public officials from making trades on forecasting platforms if they have "insider details" related to a market.

Market Background

Event-driven betting sites have surged in popularity in recent years, with participants able to bet on everything from sports to current affairs.

This sector encountered regulatory challenges under the previous administration. But it has received a warmer welcome during the present political climate.

Trading on insider information is a crime in the stock market, but there are more ambiguous rules in the event betting arena.

An official representative for Kalshi said their site "has clear rules against trading on insider information of any form."