Rep. Torres to Target Insider Trading on Prediction Markets After Maduro Bet

Source: CryptoNewsNet Original Title: Rep. Torres to target insider trading on prediction markets after bet on Maduro Original Link: US Representative Ritchie Torres is preparing to introduce legislation aimed at curbing insider trading on prediction markets, following scrutiny around a highly profitable wager tied to the sudden capture of Venezuelan President Nicolás Maduro.

Torres plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026. The bill would prohibit federal elected officials, political appointees and executive branch employees from trading prediction market contracts linked to government policy or political outcomes when they have nonpublic information through their official duties.

“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 sources familiar with the matter.

The bill mirrors existing insider trading standards in traditional financial markets but would extend them to the prediction market sector.

Bet on Maduro’s Ouster Turns into $400,000 Overnight

The proposal comes days after a newly created account on a major prediction market platform placed roughly $32,000 on a contract predicting Maduro’s removal from power by Jan. 31, 2026. Hours later, US forces reportedly captured the Venezuelan leader, sending the contract to settlement and netting the trader more than $400,000 in profit.

The account had limited prior activity, with the Maduro trade accounting for the vast majority of its gains, raising more suspicions about whether someone might have exploited political or military information through the prediction platform.

In response, certain prediction market platforms said their rules prohibit insiders or decision-makers from trading on material nonpublic information.

Prediction Market Platform Reports Account Breaches

Reports of account breaches surfaced this week after multiple users said their balances were drained following suspicious login attempts. Users described seeing several unauthorized login attempts before their positions were closed and funds reduced to near zero, despite no signs of compromise on their devices or other services.

One major prediction market platform said it identified and fixed a security issue caused by a vulnerability introduced by a third-party authentication provider. The company said the problem affected only a small number of users, has been fully remediated, and poses no ongoing risk, adding that impacted users will be contacted.