Before the U.S. military detained Venezuelan President Maduro, Polymarket experienced suspected insider trading that appeared to have prior knowledge of the news, prompting Congressman Ritchie Torres to propose restrictions on officials betting in prediction markets.
(Background: Heaven, Earth, Humanity, and Harmony—why did prediction markets take nearly 40 years to explode?)
(Additional context: 26 predictions about the development of prediction markets in 2026)

Table of Contents

• Mysterious Bets Surge 12 Times
• Prediction Market Legislation “Patch the Loopholes”
• On-Chain Anonymity Brings Law Enforcement Challenges

U.S. special forces arrested President Maduro in Caracas in the early hours of the 3rd. Hours before the operation was exposed, the blockchain prediction platform Polymarket saw a new account place a $32,500 bet on “Maduro stepping down.”

Mysterious Bets Surge 12 Times

When global war alerts were received, the market’s “Yes” side soared repeatedly, and the mysterious account profited over $400,000 with a return rate exceeding 1200%. The implied probability in the contract surged before the official U.S. statement, raising market suspicion that someone had access to undisclosed military intelligence and was cashing out early on the blockchain.

Prediction Market Legislation “Patch the Loopholes”

The above leak became a catalyst for Democratic Congressman Ritchie Torres to push for the “2026 Financial Prediction Market Public Integrity Act.” The draft explicitly states that federal elected or appointed officials and administrative staff holding significant non-public information (MNPI) are prohibited from trading contracts related to government policies, military actions, or election results on interstate prediction platforms like Polymarket and Kalshi.

Although the STOCK Act of 2012 already restricted officials from stock trading, it did not foresee prediction markets becoming a more flexible arbitrage space over a decade later. As the Trump administration relaxed legal challenges for new platforms, political contracts quickly gained mainstream popularity. Officials with insider information naturally couldn’t resist participating, raising regulatory concerns.

On-Chain Anonymity Brings Law Enforcement Challenges

By 2025, the prediction market size soared to $44 billion, entering mainstream finance. Meanwhile, in areas like Google trending searches and GPT model upgrades, there were cases of suspected employee leaks.

Polymarket wallets are only represented by addresses, making it difficult for the SEC and CFTC to investigate. Proving that anonymous addresses are linked to government or corporate insiders will test future law enforcement techniques.

The Trump administration tended to leave the market alone, but Ritchie Torres emphasized that the legislation’s goal is not to shut down platforms but to ensure that prediction prices are based on public information, preventing them from becoming personal ATM machines. He stated:

“We cannot allow federal officials to exploit public trust in the government to turn it into personal illegal windfalls. This bill will restore fairness and transparency to prediction markets.”