The revelation that a Polymarket user possibly used insider information about the capture of Venezuelan President Nicolás Maduro by US forces to profit to the tune of almost $410,000 has swept across social media. The account placed $34,000 worth of trades in the hours preceding the raid.
In response to these allegations, Representative Ritchie Torres (D-NY) plans to introduce a bill this week that would prohibit government officials from betting on politics-related prediction markets when they have access to material, non-public information.
using insider knowledge for bets in prediction markets
Axios obtained a copy of the three-page bill titled “Public Integrity in Financial Prediction Markets Act of 2026.” It proposes banning any federally elected official, an employee of an executive agency, or a political appointee from using insider knowledge for bets in prediction markets.
While Polymarket currently doesn’t have any defined ban on insider trading, its main competitor, Kalshi, does.
Highlighting the need for such controls was an announcement by Minnesota Governor Tim Walz on Monday. Traders quickly profited after they saw a transcript of his speech posted on X before he read it almost word-for-word at a press conference:
Eagle-eyed traders quickly realized that they could profit handsomely by betting on specific words he was going to mention in his speech and voting “No” on any words he was not going to say. Walz was announcing his decision not to run for re-election.
Social media users noted that anyone on the Walz staff with access to the speech before its release could theoretically use this insider knowledge to profit through prediction market platforms.
