US Representative Ritchie Torres (D-NY) is preparing to introduce legislation aimed at curbing insider trading on prediction markets, a move prompted by scrutiny around a highly profitable wager on the capture of Venezuelan President Nicolás Maduro.
The bill, titled the Public Integrity in Financial Prediction Markets Act of 2026, would prohibit federal elected officials, political appointees, and executive branch employees from trading prediction market contracts linked to government policy or political outcomes when they possess nonpublic information obtained through their official duties. The restriction applies to buying, selling, or exchanging such contracts on platforms engaged in interstate commerce.
The legislative push follows a high-profile incident on the prediction market platform Polymarket. On December 31, 2025, a newly created account placed roughly $32,000 on a contract predicting Maduro's removal from power by January 31, 2026. Hours later, US forces reportedly captured the Venezuelan leader, sending the contract to settlement and netting the trader over $400,000 in profit. The account's limited prior activity and the timing of the bet raised suspicions of potential insider information exploitation.
In response to the incident, prediction market platform Kalshi stated its existing rules prohibit insiders from trading on material nonpublic information. The news also comes amid reports of account breaches on Polymarket, which the platform attributed to a vulnerability introduced by a third-party authentication provider, stating the issue was fixed and affected only a small number of users.
The event has intensified the regulatory debate around prediction markets. Former New Jersey Governor Chris Christie has previously warned that such markets are operating unlawfully in the US and pose legal, economic, and ethical challenges.
