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A bettor profited close to $500,000 from wagers on the downfall of the Venezuelan leader immediately preceding it was made public, sparking debate about whether someone profited from confidential information of the event.

Changing Odds in Forecasts

Bets placed on the crypto-platform, a blockchain-based service, that Nicolás Maduro would be removed from office by the close of the month rose in the hours before President Donald Trump announced on the weekend that the Venezuelan leader had been apprehended.

A single trader, which joined the platform in December and placed four wagers, all on political events in Venezuela, earned over $nearly half a million from a modest bet of over $32,000.

It remains unclear. This unidentified trader had only a cryptographic address for identification.

Market Signals Before Announcement

Trading information shows that traders put the odds of Maduro's exit at just under 7% in the afternoon of the prior Friday.

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 market sentiment immediately prior to the social media post was made.

"This specific wager has all the characteristics of a transaction based on confidential knowledge," said a financial reform advocate.

A small number of other platform users also profited significant sums from predicting the capture.

Legal Questions Intensifies

Elected officials are growing concerned.

A new rule put forward on the start of the week would prevent federal workers from placing bets on forecasting platforms if they have "material nonpublic information" related to a wager.

Industry Context

Forecasting platforms have grown significantly in the past few years, with users able to predict everything from sports to political events.

Prediction markets encountered regulatory challenges under the previous administration. Yet it has received a warmer welcome during the Trump presidency.

Insider trading is a crime in the traditional financial markets, but there are less oversight in the event betting space.

A company executive for a competing service said their site "strictly forbids such activities of any form."