Earlier, Venezuelan President Nicolás Maduro was raided and arrested by the US military. He has been brought to the United States and handed over to the United States Federal Court for the Southern District of New York for trial. Although this incident itself is traceable, the speed of the US government's actions is very surprising.
On the cryptocurrency prediction market Polymarket, a newly created account was recharged with $32,000 to predict that Maduro would step down before January 31, 2026. The US military captured the Venezuelan leader just a few hours after the prediction contract was created, and the contract automatically ended.
This contract eventually provided the unknown trader with a net profit of more than $400,000. The problem is that many traders now doubt whether the unknown trader has inside information, otherwise how could he create the contract hours in advance and make a large investment.
The Polymarket prediction market adheres to the principle that everything is predictable. Whether it is regular news or such news involving politics and military, prediction contracts can be created. As long as someone creates it, others can follow the betting contract and make profits based on the final results.
Although there are contracts like this for betting on political and military content, the accuracy is obviously not that high, and if someone has inside information, they can make crazy profits from it. This is not only unfair, but also risks the leakage of sensitive information.
In response to this incident, U.S. House of Representatives Congressman Rich Torres is preparing to introduce legislation aimed at curbing insider trading in prediction markets. The bill is proposed to be called the Financial Prediction Markets Public Integrity Act. The bill prohibits U.S. federal elected officials, politically appointed officials, or executive branch employees from trading prediction market contracts linked to government decisions or political outcomes when they have non-public information due to their official duties.
The bill is similar to the existing insider trading standards in traditional financial markets, but mainly extends them to the field of prediction markets to combat government-related persons' use of inside information to profit in the prediction market and to combat potential leaks of sensitive information.