Congressman Targets Polymarket Insider Trading After Maduro Bet

A $30,000 bet on Venezuelan President Nicolás Maduro’s political fate turned into a $436,759 windfall. Now, a U.S. congressman wants to ensure government officials can never profit from such trades again.

Rep. Ritchie Torres, a New York Democrat, plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026 this week. The bill would prohibit federal elected officials, political appointees, and Executive Branch employees from trading on prediction markets when they possess nonpublic information.

⚖️ ALERT: Rep. Ritchie Torres will introduce legislation prohibiting federal officials from trading on prediction markets when they possess material nonpublic information per Punchbowl News. The bill responds to newly created Polymarket account that wagered roughly $32K on… pic.twitter.com/LHjerwvmt4

— Unchained (@Unchained_pod) January 5, 2026

The legislation comes after a suspicious trade on Polymarket drew widespread attention. A newly created account placed the $30,000 wager on Friday, betting Maduro would leave office by January 31, 2026. Following Maduro’s capture the next day, the user collected the massive payout.

Punchbowl News first reported the impending bill introduction. Torres’ spokesman confirmed the details to Business Insider.

Polymarket’s Controversial Stance on Insider Trading

Polymarket currently maintains no restrictions against insider trading on its platform. CEO Shayne Coplan has publicly defended this position, arguing that such activity can benefit markets.

What’s cool about Polymarket is that it creates this financial incentive for people to go and divulge the information to the market.

Coplan said at an Axios Business event.

The crypto-based prediction platform did not respond to requests for comment regarding the Maduro trade. This silence follows a pattern of controversy surrounding the platform’s operations.

Meanwhile, competitor Kalshi takes a different approach. The platform explicitly prohibits insider trading through its rulebook. Decision-makers with influence over event outcomes cannot trade on related markets.

Kalshi explicitly prohibits insider trading of any form, including government employees trading on prediction markets related to government activity.

spokeswoman Elisabeth Diana told Business Insider.

Diana added that Kalshi already bans the activity Torres’ bill targets. The company expressed support for measures preventing such trades while reviewing the legislation’s specifics.

Platform Faces Mounting Scrutiny Over Trading Practices

The Maduro trade adds to existing concerns about Polymarket’s integrity. A November 2025 Columbia University study found nearly 25% of the platform’s trading volume stemmed from artificial wash trading.

Researchers discovered wash trading prevalence varied significantly across market categories. Sports markets showed the highest rate at 45% of all-time volume. Election markets registered 17%, politics markets 12%, and crypto markets just 3%.

The study clarified Polymarket itself did not conduct wash trading. However, the platform’s crypto-based structure may have enabled such manipulation to occur.

The volume of activity on Polymarket has been significantly inflated by so-called wash trading in which users rapidly buy and sell the same contracts, according to a new study by Columbia University researchers https://t.co/kWTEDPn6IS

— Bloomberg (@business) November 7, 2025

A Polymarket representative told Bloomberg the company was reviewing the study. No immediate comment was provided regarding the findings.

Earlier scrutiny emerged in October 2024 when Fortune reported on wash trading claims. Research from Chaos Labs and Inca Digital suggested up to one-third of presidential trading volume could involve wash trading.

The platform faced questions about its presidential betting polls during that period. Republican nominee Donald Trump led Kamala Harris 64.9% to 35.3% in platform odds. A user known as Fredi9999m placed over $20 million in bets on Republican outcomes.

Analysts found Polymarket activity exhibited manipulation signs. Shares were bought and sold repeatedly, sometimes simultaneously, creating false impressions of volume and activity.

This isn’t the first time insider trading fears have emerged around major Trump administration actions. The pattern raises ongoing questions about prediction market integrity and regulatory oversight.

Torres’ bill represents the first concrete legislative response to these concerns. If passed, it would establish clear boundaries for government officials participating in prediction markets.