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An individual made nearly half a million dollars from wagers on the downfall of the Venezuelan leader immediately preceding it was officially announced, raising questions about the possibility of profiting from confidential information of the event.

Sudden Shift in Wagers

Wagers on Polymarket, a crypto-powered platform, that the Venezuelan president would be removed from office by the end of January rose in the period preceding former President Trump stated on January 3rd that Maduro had been seized.

One account, which became a member last month and placed four wagers, all on the Venezuelan situation, made more than $436K from a starting bet of $32.5K.

Who placed the bet is a mystery. The user had only a blockchain identifier for identification.

Probability Spikes Before Announcement

Trading information shows that traders assessed the probability of Maduro's exit at just 6.5% in the midday period of the Friday before the event.

But the market's assessment had increased to eleven percent by shortly before midnight and spiked dramatically in the first hours of January 3rd, suggesting a sudden change in positions immediately prior to the public announcement was made.

"That trade has all the characteristics of a transaction based on non-public details," stated a financial reform advocate.

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

Legal Questions Intensifies

Politicians are beginning to pay attention.

A new rule introduced on Monday would prevent public officials from participating on forecasting platforms if they have "confidential government knowledge" related to a bet.

Industry Context

Event-driven betting sites have surged in popularity in the past few years, with users able to predict everything from sports outcomes to political events.

This sector encountered regulatory challenges under the last presidential term. But it has experienced less resistance during the present political climate.

Using confidential knowledge is illegal in the traditional financial markets, but there are more ambiguous rules in the prediction market industry.

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