In Response to Suspicious Polymarket Trade Preceding Maduro Operation, Rep. Ritchie Torres Introduces Legislation to Crack Down on Insider Trading on Prediction Markets

Last weekend, a brand new account on the prediction market site Polymarket placed a bet of over $30,000 that Venezuelan President Nicolás Maduro would be removed from office by the end of January. A few hours later, the Trump administration conducted its raid and capture of Maduro. The timing of this bet and the gargantuan $400,000 payout raised immediate suspicion that the individual behind the trade had inside knowledge of the administration’s planned operation. Widespread condemnation over the lack of safeguards preventing insider trading on prediction markets from government officials spread rapidly, including by Congressman Ritchie Torres (NY-15), who quickly announced legislation to address this opening for flagrant corruption.

Today, Rep. Torres is officially introducing the Public Integrity in Financial Prediction Markets Act of 2026 into the U.S. House of Representatives. The bill prohibits federal elected officials, political appointees, Executive Branch employees, and congressional staff from buying, selling, or exchanging prediction market contracts tied to government policy, government action, or political outcomes when they possess material nonpublic information or could reasonably obtain such information through their official duties. 

The Public Integrity in Financial Prediction Markets Act of 2026 is co-sponsored by a wide coalition of House Democrats, including Reps. Alma Adams (NC-12), Wesley Bell (MO-01), Janelle Bynum (OR-05), Andre Carson (IN-07), Sean Casten (IL-06), Chris Deluzio (PA-17), Bill Foster (IL-11), Dan Goldman (NY-10), Pablo José Hernández (PR-AL), Steven Horsford (NV-04), George Latimer (NY-16), Mike Levin (CA-49), Sarah McBride (DE-AL), Kristen McDonald Rivet (MI-08), Morgan McGarvey (KY-03), Seth Moulton (MA-06), Del. Eleanor Holmes Norton (DC-AL), Speaker Emerita Nancy Pelosi (CA-11), Brittany Pettersen (CO-07), Josh Riley (NY-19), Terri Sewell (AL-07), Brad Sherman (CA-32), Darren Soto (FL-09), Greg Stanton (AZ-04), Suhas Subramanyam (VA-10), Shri Thanedar (MI-13), Rashida Tlaib (MI-12), Dina Titus (NV-01), Juan Vargas (CA-52), and Eugene Vindman (VA-07).

Prediction markets tied to political and policy outcomes raise serious ethical concerns when accessed by individuals with inside knowledge of government decision-making. This legislation establishes clear guardrails to ensure that public servants cannot profit from information gained through their official roles or from outcomes they may influence.

“The most corrupt corner of Washington, D.C. may well be the intersection of prediction markets and the federal government—where insider trading and self-dealing are no longer imagined risks but demonstrated dangers,” said Rep. Ritchie Torres. “We ignore this plain-sight corruption at our own peril. Imagine, for a moment, a member of the Trump Administration were to place a bet predicting an event like the removal of Nicolás Maduro. As both a government insider and a participant in the prediction markets, that individual would face a perverse incentive to personally push policies that line his pockets. Prediction-market profiteering by government insiders must be prohibited—period. The blurred line between predicting and profiting does not simply corrupt markets; it corrupts the government itself, transforming public service into a private enterprise. Just as Donald Trump has been using crypto to enrich himself and his family, there is reason to fear that Trump or his associates could do the same when it comes to prediction markets. No elected official is elected to profit from elected office. Government is not a for-profit enterprise; it is a public trust. It does not belong to the elected officials. It belongs to the people who elect them.”

“Congressman Torres’s ‘Public Integrity in Financial Prediction Markets Act of 2026’ is a commonsense reform,” said Melinda Roth, Visiting Associate Professor of Law at Washington and Lee University School of Law. “Using material nonpublic information to buy, sell, or trade event contracts is wrong, just as it is wrong for any other financial investment. Event contracts are an emerging asset class in the growing prediction markets, and these markets must be free of any insiders (including government officials or employees, whether elected or appointed) using material nonpublic information to gain an informational advantage in this marketplace.”

“Insider trading, including in prediction markets, is not a victimless act,” said Eric Zitzewitz, Professor of Economics at Dartmouth College. “Profits typically come from people who provide liquidity to markets by posting limit orders.  The potential for insider trading reduces the liquidity of markets, and in some cases, it can cause prediction markets to fail to provide useful information about event probabilities.”

The full text of the bill is attached as a PDF here.