Torres Targets Prediction Markets After Venezuela Bet Raises Insider Trading Concerns

• Lawmakers move to restrict insider trading risks on political prediction markets
• Venezuela betting windfall sparks scrutiny of information leaks and market timing
• Torres bill targets officials exploiting nonpublic policy intelligence for profit

A fresh debate over political betting erupted after a lawmaker signaled plans to curb trading by government insiders, following intense online scrutiny of prediction markets tied to sensitive U.S. foreign policy outcomes. According to Jake Sherman, Rep. Ritchie Torres will introduce the Public Integrity in Financial Prediction Markets Act of 2026, a proposal that aims to restrict trading activity by officials with access to confidential government information.

Notably, the bill would bar federal lawmakers, political appointees, and executive branch employees from certain contracts when they possess or could reasonably obtain material nonpublic information through official duties. Meanwhile, attention turned toward major platforms hosting political prediction markets, as Kalshi’s press relations account said in replies to Sherman’s post that insider trading already violates its rulebook.

Similarly, rivals faced renewed scrutiny as a dramatic Venezuela-related trade circulated online, with a Polymarket account created in late December becoming central to the discussion. According to Axios, the account placed about $32,500 on Nicolás Maduro being removed from power, purchasing shares near $0.07 while implied odds remained in low single digits.

Soon after, events escalated rapidly when President Donald Trump announced that U.S. forces had taken Nicolás Maduro into custody following overnight strikes in Caracas. Consequently, the contracts resolved near $1 per share, generating more than $400,000 in profit and exceeding a 1,200 percent return within 24 hours. Adding to speculation, the Wall Street Journal reported unusual market movement before the official announcement, noting that prices began climbing shortly before 10 p.m. ET and raised questions about advance knowledge.

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Growing Focus on Information Signals and Market Oversight

Besides direct trades, some users cited unconventional indicators, as one Polymarket trader claimed earning $80,000 by tracking late-night orders near the Pentagon. The trader pointed to activity at Domino’s Pizza locations as a proxy for heightened military operations, and although unproven, the theory fueled broader debate around informational edges.

Additionally, political ties within the prediction market space drew attention, with Donald Trump Jr. holding advisory roles at both major platforms. He serves as a strategic advisor to Kalshi and sits on Polymarket’s advisory board, following an eight-figure investment by his venture capital firm, hence intensifying scrutiny around governance gaps.

Moreover, supporters argue that clear statutory limits could strengthen public trust, saying internal platform rules may not sufficiently address conflicts involving public servants. Torres’ office did not immediately respond to media requests, while Polymarket also declined to comment on the unfolding debate.

Ultimately, the episode underscores rising tension between open markets and political accountability as prediction platforms expand. Consequently, lawmakers appear poised to test where transparency should draw firm legal lines.

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