A cluster of suspicious wagers netted more than $630,000 on Polymarket after betting on the arrest of Venezuelan President Nicolás Maduro.
The activity triggered a swift legislative response in Washington, with lawmakers moving to ban federal officials from trading on prediction markets.
Lawmakers Move to Bar Officials From Prediction Markets
On January 4, blockchain analytics firm Lookonchain identified three digital wallets that netted a combined profit of $630,484 on Polymarket by betting on the removal of Maduro.
Notably, the wallets were created and funded days before the operation, had no prior trading history, and only targeted contracts tied to the Venezuelan leader.
According to on-chain data, one wallet identified as “0x31a5” wagered about $34,000 and booked nearly $410,000 in profit, while another turned $25,000 into $145,600. The third wallet converted a $5,800 bet into roughly $75,000.
The precision of the trades—executed shortly before the news broke globally—suggests the bettors may have possessed advanced knowledge of the sensitive diplomatic and military maneuver.
Considering this, Lookonchain said that these wallets’ trading patterns strongly suggested they had “insider” access to non-public information.
Consequently, the incident has catalyzed an immediate push to close regulatory loopholes.
Rep. Ritchie Torres reportedly plans to introduce the Public Integrity in Financial Prediction Markets Act of 2026. The bill would bar government insiders from profiting from outcomes they can influence or anticipate.
According to reports from Punchbowl News, which Torres acknowledged on social media, the legislation would impose a strict ban.
It would prohibit federal elected officials, political appointees, and executive branch employees from buying, selling, or exchanging contracts on platforms such as Polymarket and Kalshi.
“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,” Jake Sherman, founder of Punchbowl News, explained.
The bill aims to extend ethical frameworks similar to the STOCK Act to the decentralized betting economy.
If passed, it would ban government personnel from using material non-public information on federal enforcement, court rulings, or foreign policy for personal gain.
Essentially, the measure aims to protect the integrity of markets that rely on the wisdom of the crowd.
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