U.S. Rep. Ritchie Torres said he will introduce legislation to curb what he and other lawmakers described as possible insider trading in prediction markets, after a single, highly timed bet on Polymarket paid off as Venezuelan President Nicolas Maduro captured.
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Reports have revealed that the bill – called the Public Integrity in Financial Prediction Markets Act of 2026 – would ban federally elected officials, political appointees and executive branch personnel from trading in event markets if they have material non-public information.
Public integrity in focus
According to reports, a newly created Polymarket account placed approximately $32,500 in bets on a contract asking whether Maduro would be out of power by January 31, 2026. That bet bought about 438,000 shares when the market price was as low as $0.07 per share late Friday.
Within about 24 hours, following action by US forces and an announcement by US President Donald Trump, the position soared. $400,000 to the account.
NEW — RITCHIE TORRES (DN.Y.) will introduce a bill on this matter.
The bill will be called the Public Integrity in Financial Prediction Markets Act of 2026
Description, per source:
This bill prohibits federal elected officials, political appointees, and employees of the executive branch… https://t.co/eZZ9BmAMgJ
— Jake Sherman (@JakeSherman) January 3, 2026
The timing of the transaction raised immediate questions. Social media users and some investors labeled the purchase as suspicious because it took place hours before the public announcement.
Observers noted that prediction markets can respond quickly to small flows of information, and that enforcement rules vary between platforms.
Reports indicate that other markets, such as Kalshi, had similar outcomes priced at around $0.13, underscoring how unexpected the outcome was for many traders.
A newly created Polymarket account yesterday invested more than $30,000 in Maduro’s departure. The US then took Maduro into custody overnight, and the trader made $400,000 in profits in less than 24 hours. Insider trading is not only allowed in prediction markets; it is encouraged. https://t.co/EtZyW1IWTa pic.twitter.com/MzsU9kOU73
— Joe Pompliano (@JoePompliano) January 3, 2026
How the bill would work
Torres’ proposal would adapt principles of existing rules that restrict trading by officials in traditional securities markets and extend them to online prediction exchanges.
The draft language aims to make it unlawful for covered government figures to act under contracts related to government actions or political events while having non-public information because of their official role.
The measure would also direct regulators to clarify which platforms are covered and how violations can be enforced.
Market reaction and questions
Platform operators have long said their terms prohibit trading in material non-public information, but critics say these rules are difficult to monitor in real time.
Some analysts and lawmakers argue that this episode shows a disconnect between written policy and effective oversight. Others warn against overreach that could stifle legitimate market activity used for forecasting and research.
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Investigations may look at the origins of the account and any links to people with privileged knowledge. Lawmakers, meanwhile, are pushing for clearer legal guardrails. If Congress acts quickly, new rules could reshape who can legally bet on political and national security events.
Featured image from AFP/Getty Images, chart from TradingView