A Trader Profited $400,000 from Maduro's Arrest, U.S. Lawmakers Plan to Legislate Against Prediction Market 'Insider Trading'

BlockBeats News, January 4th, according to The Block, Punchbowl News founder Jake Sherman revealed on Saturday that U.S. Representative Ritchie Torres will introduce legislation titled the "2026 Financial Prediction Market Public Integrity Act" aimed at combating potential insider trading on prediction market platforms.

The report stated that the bill would prohibit federal elected officials, political appointees, and executive branch employees from trading in prediction market contracts related to government policy or political outcomes when they possess or could reasonably be expected to possess material nonpublic information by virtue of their position. In the comments section of Sherman's related post, the PR account of prediction market platform Kalshi responded, stating that its platform rules expressly prohibit insiders or decision-makers from trading on material nonpublic information.

The introduction of the bill follows trading activity on a newly created account on Polymarket: a trader created an account on Polymarket at the end of December last year and only made four trades, all related to U.S. intervention in Venezuela, wagering approximately $32,500 that Maduro would be "out" by January 31st, with a purchase price of around $0.07 when the market's implied probability was only in the single digits. By Saturday morning confirmation of Maduro's ousting, the settlement price was close to $1, resulting in profits of over $400,000 in less than 24 hours, with a return of over 1,200%. The Wall Street Journal reported that prices for markets related to Maduro's ousting began to surge shortly before 10 p.m. Eastern Time on Friday, hours ahead of Trump's official announcement.