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An individual made nearly half a million dollars by predicting the removal of Venezuela's president shortly prior to it was made public, raising questions about the possibility of profiting from inside knowledge of American actions.

Market Movement in Predictions

Wagers on Polymarket, a blockchain-based service, that the Venezuelan president would be out of power by the month's conclusion increased in the hours before President Donald Trump announced on the weekend that the Venezuelan leader had been seized.

A single trader, which became a member recently and took four positions, all on Venezuela, earned over $nearly half a million from a starting bet of $32.5K.

Who placed the bet is a mystery. The user had only a cryptographic address for identification.

Probability Spikes Before News Break

Trading information shows that participants estimated the likelihood of the president's removal at just 6.5% in the midday period of the prior Friday.

But these probabilities had jumped to eleven percent by shortly before midnight and skyrocketed in the early hours of the next day, indicating a sharp shift in betting activity just before the public announcement was made.

"This particular bet has all the hallmarks of a trade based on confidential knowledge," said an industry expert.

A small number of other traders also earned tens of thousands of dollars from similar wagers.

Regulatory Scrutiny Emerges

Elected officials are growing concerned.

A bill presented on Monday would prevent public officials from placing bets on prediction markets if they have "material nonpublic information" related to a wager.

The Prediction Market Landscape

Event-driven betting sites have surged in popularity in the United States, with users able to bet on everything from sports outcomes to current affairs.

The industry encountered regulatory challenges under the previous administration. Yet it has experienced less resistance during the Trump presidency.

Trading on insider information is a crime in the securities markets, but there are less oversight in the prediction market arena.

A company executive for another major platform said their site "has clear rules against trading on insider information of any form."