Torres Moves to Ban Prediction Market Insider Trading After Prescient $400K Maduro Bet
Rep. Ritchie Torres targets prediction market ‘insiders’ with new legislation after a suspicious Polymarket account netted 1,200% on Maduro’s capture hours before the news broke.
A 1,200% windfall on a singular geopolitical bet has triggered immediate congressional action. Representative Ritchie Torres (D-NY) is set to introduce the Public Integrity in Financial Prediction Markets Act of 2026, legislation explicitly targeting the type of suspicious trading activity that preceded the capture of Venezuelan President Nicolás Maduro.
The move follows a report by Punchbowl News detailing how a newly created Polymarket account successfully front-ran Donald Trump’s official announcement, netting over $400,000 in profit.
The 7-Cent Signal
Markets often move before the news, but rarely with this level of precision. On Friday night, hours before President Trump confirmed U.S. military action in Caracas, prediction markets began pricing in a regime change with aggressive volume.
According to on-chain data, a Polymarket account funded in late December wagered approximately $32,500 on Maduro’s ouster. The trader purchased shares at roughly 7 cents (7% probability). By Saturday morning, those shares resolved at $1.00, yielding a return exceeding 1,200% in under 24 hours.
The timing is the vector of concern. The “Maduro Out” contract began its vertical ascent shortly before 10 p.m. ET Friday. The official confirmation from the White House did not arrive until early Saturday.
Extending the STOCK Act
Torres’ legislation aims to close the regulatory gap that currently treats prediction markets differently from traditional equities. The bill would prohibit federal employees, including political appointees and executive branch staff, from trading prediction contracts tied to government policy when they possess material non-public information.
While the STOCK Act already bars congressional insider trading in stocks, prediction markets like Polymarket (on Polygon) and Kalshi offer direct derivatives on federal decision-making, creating a cleaner mechanism for monetizing classified intel.
The Institutional Conflict
The crackdown lands in a complex political landscape. The prediction market sector is now deeply entwined with the administration’s orbit. Donald Trump Jr. currently serves as a strategic advisor to both major competitors in the space: he joined Kalshi’s team in January 2025 and sits on Polymarket’s advisory board following an investment by 1789 Capital.
Torres’ bill signals that while prediction markets have proven their utility as information aggregators, their predictive power often stems from an uneven playing field. One Congress intends to level.
