A Trader Profited $400,000 from Maduro's Arrest, US Lawmaker Plans to Legislate Against Prediction Market 'Insider Trading'

BlockBeats News, January 4th, according to The Block, Punchbowl News founder Jake Sherman revealed on Saturday that US Congressman Ritchie Torres will introduce legislation called the "2026 Financial Forecast Market Public Trust Act," aimed at combating potential insider trading behavior on prediction market platforms.

The report stated that the bill aims to 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 may reasonably obtain significant nonpublic information through their official duties. In the comments section of Sherman's related post, the public relations account of prediction market platform Kalshi responded, stating that its platform rules explicitly prohibit insiders or decision-makers from trading based on significant nonpublic information.

The introduction of this bill stemmed from the trading activity of 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 US intervention in Venezuela, wagering about $32,500 that Venezuelan President Maduro would be "overthrown" by January 31st, with a purchase price of about $0.07, while the market's implied probability was only in the single digits. After Maduro's confirmed arrest on Saturday morning, the settlement price approached $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 ouster began to rise shortly before 10 p.m. Eastern Time on Friday night, hours before Trump's announcement revealing Maduro's arrest.