Maduro Capture Bet Triggers Call for Prediction Market Crackdown

US Representative Ritchie Torres is preparing legislation meant to restrict insider trading on prediction markets after a controversy surrounding a highly profitable wager linked to the sudden capture of Venezuelan President Nicolas Maduro.

According to reports, the bill is expected to be introduced as the Public Integrity in Financial Prediction Markets Act of 2026. If it becomes law, it would bar federal officials from trading certain prediction contracts when they have access to non-public information thanks to their official roles.

Jake Sherman, the founder of Punchbowl News, explained the proposal on X, saying that it is meant to prohibit federal elected officials, political appointees, and executive branch employees from buying, selling, or exchanging prediction market contracts tied to government policy, government action, or political outcomes. 

Furthermore, the restriction would apply when these individuals possess, or could reasonably obtain, material non-public information as part of their duties.

The move comes after a relatively new Polymarket account invested around $32,000 in Maduro’s removal from power by January 31, 2026, only for the US to take Maduro into custody mere hours later. As a result, the trader made $400,000 in profit in under 24 hours. 

There Is No Proof of Insider Trading, But The Timing Raised Suspicion

The new framework mirrors insider trading standards that are already applied when it comes to trading stocks and other securities. However, it would extend those principles into the prediction market sector. Representative Torres’ spokesperson said that the bill has been under development for some time, but the mentioned event significantly accelerated the decision to bring it forward as soon as possible.

The timing of the trade raised quite a few eyebrows, as the account had almost no prior activity, and most of its profits came from the Venezuela wager. However, so far, there is no evidence that the account owner is a government insider. Even so, the development has fueled concern that prediction markets could be used to monetize sensitive military or political information prior to it going public.

It is worth noting that Polymarket and other similar platforms already have rules in place that forbid insider trading, even though this has not yet become a part of the official law. However, despite the rules, the enforcement mechanisms are largely internal and not transparent to outside observers.

Torres’ proposal would formalize these boundaries by statute, instead of relying on the platforms to prevent insiders from abusing the system for their benefit.