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An individual made nearly half a million dollars by predicting the removal of Venezuela's president just before it was made public, sparking debate about the possibility of profiting from inside knowledge of American actions.

Sudden Shift in Wagers

Bets placed on the crypto-platform, an online prediction market, that the leader would be removed from office by the end of January increased in the hours before former President Trump declared on Saturday that Maduro had been taken into custody.

One account, which joined the platform recently and took four positions, all on political events in Venezuela, made more than $436K from a modest bet of $32,537.

The identity is unknown. This unidentified trader had only a string of letters and numbers for identification.

Probability Spikes Before News Break

Trading information shows that traders assessed the probability of a political change at just a low 6.5 percent in the afternoon of the prior Friday.

But these probabilities had climbed to over 10% by shortly before midnight and surged in the first hours of the next day, suggesting a sharp shift in market sentiment just before the official statement was made.

"This particular bet has all the signs of a bet based on confidential knowledge," commented a financial reform advocate.

Several of other traders also profited significant sums from bets on the same outcome.

Regulatory Scrutiny Intensifies

Politicians are starting to take note.

Proposed legislation presented on Monday would prevent public officials from participating on forecasting platforms if they have "material nonpublic information" related to a market.

Market Background

Forecasting platforms have surged in popularity in the United States, with participants able to bet on everything from sports outcomes to political events.

Prediction markets faced scrutiny under the previous administration. However it has found a more favorable environment during the Trump presidency.

Using confidential knowledge is against the law in the traditional financial markets, but there are more ambiguous rules in the event betting space.

An official representative for Kalshi said their site "strictly forbids insider trading of any form."