By betting on the future of Venezuelan President Nicolás Maduro via the Polymarket platform, an anonymous trader pocketed several hundred thousand pounds. Behind this spectacular gain lies a sensitive question: have prediction markets become a new El Dorado for the exploitation of confidential information?
A geopolitical bet with astronomical profits
In late December 2025, just before a large-scale military operation by US forces in Venezuela, a newly created account on Polymarket placed a bet of around $24,000 predicting that Nicolás Maduro would be ousted from office before the end of January. Just hours after news of the capture was made public, this bet turned into a windfall of around $300,000, more than twelve times the initial stake.
The size of the win and the perfect timing fuelled speculation that the trader(s) had access to non-public, or even classified, information. Although the trader’s identity remains secret, the event has sparked reactions in circles beyond the world of prediction markets.
A legal grey area brought to light
Unlike traditional stock markets or financial securities, prediction markets such as Polymarket do not clearly fall under US insider trading laws. Whereas trading based on inside information is strictly prohibited in regulated markets, these platforms often operate in a legal grey area, accessible in many cases to users around the world and not subject to the same rules as traditional stock exchanges.
Although platforms such as Kalshi state in their internal rules that they prohibit the use of confidential information, this prohibition is often contractual and not covered by law. In other words, a user can violate the terms of use without breaking any federal laws or regulations set by authorities such as the Commodity Futures Trading Commission (CFTC).
Congress decides to intervene
In response to these growing concerns, Representative Ritchie Torres (D-NY) took the initiative to draft a bill called the Public Integrity in Financial Prediction Markets Act of 2026. This bill aims to apply the principles against insider trading used in traditional financial markets to prediction markets.
In its proposed form, the bill would prohibit federal civil servants, members of Congress, senior politicians and executive branch employees from placing bets on platforms such as Polymarket if they possess or are likely to obtain non-public information in the course of their official duties.
The aim is to fill what Torres and his supporters see as a legal loophole: without specific rules, these markets could be used as a backdoor way to profit from political decisions or government strategies before they are publicly announced. Although the bill was drafted quickly after the incident in Venezuela, its passage is not guaranteed. The US Congress has already struggled to agree on the regulation of emerging technologies such as cryptocurrency and artificial intelligence, often due to partisan differences and conflicting economic interests.