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Rep. Torres Moves to Ban Officials From Prediction Markets After Suspicious $400K Maduro Bet

Rep. Ritchie Torres is transferring to formally limit how U.S. authorities officers take part in prediction markets after a extremely worthwhile wager tied to the sudden seize of Venezuelan President Nicolás Maduro raised recent issues about insider buying and selling and public belief.

The New York Democrat is getting ready to introduce the Public Integrity in Financial Prediction Markets Act of 2026.

The invoice would prohibit federally elected officers, political appointees, and govt department workers from shopping for, promoting, or buying and selling prediction market contracts tied to authorities coverage, actions, or political outcomes once they possess, or may moderately entry, materials nonpublic info by means of their official roles.

Draft invoice textual content was shared with media retailers earlier this week, and Torres’ workplace stated the proposal has been underneath growth for a while however gained urgency following current occasions.

A $32,000 Bet, a Maduro Arrest, and Growing Insider Trading Concerns

The push follows scrutiny round a Polymarket commerce that turned roughly $32,000 into greater than $400,000 in lower than a day.

Source: Joe Pompliano

A newly created account wagered that Maduro can be faraway from energy by the top of January 2026, buying shares when the implied likelihood was within the low single digits.

The market started rising late Friday night, hours earlier than President Donald Trump announced that U.S. forces had taken Maduro and his wife, Cilia Flores, into custody throughout in a single day operations.

Once the information grew to become public, the contract settled close to its most payout, producing returns exceeding 1,200%.

The account had minimal prior exercise, and all of its identified trades have been tied to U.S. intervention in Venezuela, intensifying hypothesis that the wager could have been knowledgeable by nonpublic political or navy info.

Maduro and Flores later pleaded not responsible on Monday to U.S. costs alleging large-scale cocaine trafficking carried out with the safety of Venezuelan safety forces.

Punchbowl News founder Jake Sherman said Torres supposed to clearly set up that such conduct is against the law underneath federal regulation, mirroring insider buying and selling requirements that exist already in conventional monetary markets.

While the preliminary model of the invoice doesn’t introduce new penalties or enforcement mechanisms past present statutes, it will explicitly lengthen these ideas to prediction markets, which at the moment function in a extra fragmented regulatory setting.

As Prediction Markets Grow, Lawmakers Push for Clear Rule

Prediction markets have grown quickly over the previous two years, transferring from a distinct segment product to a multibillion-dollar sector. Combined buying and selling quantity throughout main platforms exceeded $44 billion in 2025, with weekly notional quantity topping $5.3 billion in early January 2026.

Source: DeFiRate

Platforms like Kalshi, which operates as a regulated U.S. alternate, and Polymarket, which serves a extra international person base, permit merchants to speculate on a variety of outcomes spanning politics, sports activities, economics, and tradition.

Political markets have drawn specific consideration due to their sensitivity and potential overlap with authorities decision-making.

While sports activities dominate quantity on some regulated platforms, political occasions stay a significant driver of exercise on others, particularly throughout election cycles or main geopolitical developments.

The 2024 U.S. presidential election alone generated billions of dollars in trading volume.

In response to the rising debate, Kalshi’s press relations account said the platform already prohibits insiders or decision-makers from buying and selling on materials nonpublic info underneath its guidelines.

However, Torres and different lawmakers argue that platform-level restrictions are inadequate with no clear federal commonplace that applies uniformly to authorities officers.

The proposed laws would additionally construct on the ideas of the STOCK Act, which governs insider buying and selling by members of Congress in conventional monetary belongings, extending comparable expectations to newer monetary devices.

The publish Rep. Torres Moves to Ban Officials From Prediction Markets After Suspicious $400K Maduro Bet appeared first on Cryptonews.

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