Torres Moves to Ban Officials From Trading Political Prediction Markets
- A Polymarket trader profited over $400,000 on a Venezuela-related bet that surged hours before Donald Trump announced the capture of Nicolás Maduro.
- The suspicious timing of the trade sparked concerns about insider trading, leading Representative Ritchie Torres to propose a bill banning government officials from using nonpublic information on prediction markets.
- The proposed legislation aims to apply STOCK Act ethics standards to both centralised and decentralised platforms to prevent federal employees from profiting from government policy or foreign actions.
A Polymarket wager that turned about US$32.5K (AU$49K) into more than US$400K (AU$612K) within a day is driving a new push in Congress to restrict trading by government insiders on prediction platforms.
The trade drew attention after President Donald Trump said on Saturday that US forces had taken Venezuelan President Nicolás Maduro into custody following overnight military strikes on Caracas.
Axios reported that a Polymarket account opened in late December placed only four bets, all tied to US intervention in Venezuela, and bought contracts predicting Maduro would be “out” by Jan. 31 at around US$0.07 each when the implied odds were in the low single digits.
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Maduro’s Capture Was The Trigger
After Maduro’s capture was confirmed Saturday morning, the contracts settled near US$1, producing the outsized gain. The Wall Street Journal reported the market began moving sharply higher shortly before 10 p.m. ET on Friday, hours before Trump’s announcement.
Rep. Ritchie Torres is now expected to introduce the Public Integrity in Financial Prediction Markets Act of 2026, according to Punchbowl News founder Jake Sherman.
The proposal would bar federal elected officials, political appointees, and executive branch employees from trading prediction-market contracts tied to political outcomes or government policy when they have, or could reasonably obtain through their roles, material nonpublic information.
A spokesperson for Torres said the bill had been in development, but the Venezuela bet highlighted the need to move quickly. The measure currently has no co-sponsors, the spokesperson said, and Torres plans to build support in the weeks ahead.
Torres’ bill would seek to apply ethics standards similar to the STOCK Act to prediction markets, including decentralised venues, by prohibiting government personnel from using nonpublic knowledge about enforcement actions, court rulings, or foreign policy decisions for personal gain.
Kalshi, another prediction-market platform, pointed to its own rules in response to the discussion, saying its rulebook already prohibits trading on material nonpublic information by insiders or decision-makers.
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The post Torres Moves to Ban Officials From Trading Political Prediction Markets appeared first on Crypto News Australia.
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