A United States lawmaker has introduced new legislation aimed at restricting political prediction market trading by government insiders following a high-profile wager linked to Venezuela’s leadership.
The proposal emerged after a user on Polymarket reportedly earned more than $400,000 from a contract predicting the removal of Venezuelan President Nicolás Maduro.
The bet was placed days before US forces carried out a military operation that resulted in Maduro’s capture and transfer to New York to face criminal charges.
The timing of the trade sparked concerns about insider trading and the potential misuse of privileged government information.
New York Representative Ritchie Torres introduced the Public Integrity in Financial Prediction Markets Act of 2026 in response to the incident.
Torres said the episode exposed risks when elected officials and government staff participate in political prediction markets.
The bill seeks to prohibit federal officials and congressional staff from trading prediction contracts tied to political outcomes or government actions.
The restriction would apply when officials possess, or could reasonably access, material nonpublic information through their official roles.
According to Torres, the bill would cover federal elected officials, political appointees, executive branch employees, and congressional staff.
The legislation is designed to prevent conflicts of interest that could arise from policy decisions influenced by personal financial gain.
The most corrupt corner of Washington, DC 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.
Ritchie Torres said.
We ignore this plain-sight corruption at our own peril.
Ritchie Torres added.
The bill was introduced less than a week after a Polymarket account placed a $32,000 bet on Maduro’s removal by the end of January.
US President Donald Trump later announced illustrating that US forces had entered Venezuela and captured Maduro during a military operation.
The winning wager intensified scrutiny over whether government insiders could exploit prediction markets for profit.
Torres warned that allowing officials to trade on platforms like Polymarket or Kalshi could incentivise policy decisions driven by personal gain.
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,”
Ritchie Torres noted.
No elected official is elected to profit from elected office.
Ritchie Torres highlighted.
Polymarket did not respond to requests for comment on the proposed legislation at the time of publication.
While the House considers Torres’ bill, the US Senate is preparing to advance broader digital asset legislation.
Senators are expected to hold a markup on a market structure bill affecting the cryptocurrency industry.
The legislation aims to redefine regulatory responsibilities between the Commodity Futures Trading Commission and the Securities and Exchange Commission.
Senate Banking Committee Chair Tim Scott said the committee plans to review the bill on Thursday.
The outcome could shape the regulatory landscape for crypto markets and related financial products in the United States.