After Venezuela Attack, Rep. Torres Pitches Prediction Markets Insider Trading Bill

• New York Democrat reportedly plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026.
• If approved, it’d bar select federal workers from trading event contracts linked to political events.
• Move appears to linked to insider trading on Polymarket tied to the US attack on Venezuela.

In a move that appears motivated by allegations of insider trading on Polymarket tied to the US attack on Venezuela, Rep. Ritchie Torres (D-NY) will reportedly introduce legislation that will bar certain federal staffers from trading event contracts on policy and political events.

In a weekend post on X following the US incursion resulting in the arrest of Venezuelan Dictator Nicolas Maduro, Punchbowl News founder Jake Sherman reported Torres is planning to introduce the Financial Prediction Markets Act of 2026.

The restriction applies to buying, selling, or exchanging prediction market contracts tied to government policy, government action, or political outcomes on platforms engaged in interstate commerce,” according to Sherman’s X post.

If signed into law, the Torres legislation would bar politicians, political appointees and members of the Executive Branch from trading certain event contracts when they come into contact with nonpublic information through their jobs. In other words, the Torres bill is very much an anti-insider trader proposal aimed at prediction markets.

What Spurred the Torres Bill

News of the Torres legislation emerged after reports surfaced on X that a new Polymarket account invested $30,000 on Friday on an event contract pertaining to Maduro’s ouster. In just 24 hours, that trader’s investments netted profits north of $400,000.

Lookonchain, an on-chain analytics firm, noted three wallets, including the one mentioned above, collected more than $630,000 on trades tied to Polymarket contracts on Maduro being removed from power by Jan. 31.

There’s also been chatter that elevated activity in event contracts tied to debut date of DraftKings’ prediction market offering was also the work of an insider. DraftKings Predictions launched on Dec. 19.

Prediction Markets Currently the Wild West

Amid soaring reports of insider trading on prediction markets, the industry increasingly looks like the Wild West because there are no rules and regulations pertaining to trading on nonpublic information as there are in traditional financial markets.

The Torres legislation, which is the first of its kind, aims to change that. His bill would extend provisions of the STOCK Act (Stop Trading on Congressional Knowledge Act of 2012) to prediction markets.

While the STOCK Act requires members of Congress to disclose their buying and selling activity in various securities, critics claim the law doesn’t contain harsh penalties and thus doesn’t function as an adequate insider trading deterrent.