Torres Files ‘Public Integrity’ Bill After Polymarket Trader Nets 1,200% on Maduro Raid
A suspicious 13x return on Maduro’s capture prompts Rep. Ritchie Torres to introduce legislation extending STOCK Act bans to prediction markets.
Rep. Ritchie Torres (D-N.Y.) moved to plug a gaping regulatory hole in prediction markets Sunday, announcing the Public Integrity in Financial Prediction Markets Act of 2026. The legislation, reported by Punchbowl News, follows a highly suspicious Polymarket trade that turned $32,500 into $436,759 hours before U.S. forces captured Venezuelan President Nicolás Maduro.
The Trade That Triggered Congress
On Saturday, January 3, President Trump confirmed the U.S. military had seized Maduro in Caracas. But the market moved first.
A Polymarket account created on December 27, with no prior history, aggressively accumulated shares betting on Maduro’s ouster. The trader bought in at roughly 7 cents (7% probability) when the rest of the market saw the event as a geopolitical impossibility. As news of the raid broke, the shares settled near $1.00.
The account liquidated the position for a $404,000 profit (1,243%) in under 24 hours. The precision of the entry, just days before the operation, forced lawmakers to confront what has become an open secret: prediction markets are currently a free-for-all for those with clearance.
The ‘Public Integrity’ Act
Torres’ bill explicitly extends the STOCK Act principles to prediction markets, which processed over $44 billion in volume in 2025. Key provisions include:
- Federal Ban: Prohibits elected officials, political appointees, and executive branch employees from trading event contracts tied to government policy or political outcomes.
- Insider Definition: Criminalizes trading on platforms like Polymarket or Kalshi while possessing “material nonpublic information” derived from official duties.
While the STOCK Act theoretically covers securities, its application to event contracts, which are regulated by the CFTC as derivatives, has remained legally ambiguous. This bill removes the gray area.
Institutional Context
The timing is critical. Prediction markets have morphed from niche experiments into systemic information oracles. Polymarket volume exploded in the last year, often front-running traditional news wire services on events ranging from ETF approvals to military strikes.
Critics argue the Maduro trade mimics the “trustless” ideal of crypto but exposes a fatal flaw: without KYC or insider trading guardrails, these markets can become monetization engines for state secrets. As Joe Pompliano noted during the fallout:
“Insider trading is not only allowed on prediction markets; it’s encouraged.”
With the CFTC already scrutinizing offshore access to U.S. markets, this legislation signals that Washington views prediction markets less as novelties and more as potential vectors for corruption.
