House Democrat Ritchie Torres Proposes Ban on Government Officials’ Insider Trading in Online Prediction Markets

A House Democrat has introduced legislation aimed at preventing government officials from engaging in insider trading within online prediction markets. Rep. Ritchie Torres (D-N.Y.) has proposed the Public Integrity in Financial Prediction Markets Act of 2026, a bill that would prohibit federal elected officials, political appointees, and bureaucrats from placing bets on prediction platforms using nonpublic information.

The legislation follows reports that traders on Polymarket generated substantial profits by betting on the downfall of former Venezuelan President Nicolas Maduro just before his extradition to the United States. One trade reportedly yielded over $400,000, sparking concerns about potential insider trading ahead of Maduro’s arrest.

While insider trading is already illegal in traditional financial markets and enforced by the Justice Department and Securities and Exchange Commission, prediction markets operate with minimal regulatory oversight. The proposed law would require that any information used for betting be publicly available and significant enough to influence a “reasonable investor.”

The bill faces challenges as Congress has struggled to regulate emerging sectors such as cryptocurrency and artificial intelligence. It remains unclear whether House Speaker Mike Johnson will bring the legislation to a vote or if President Donald Trump would sign it into law.

In response, Elisabeth Diana, a spokeswoman for prediction platform Kalshi, stated that her company is regulated by the Commodity Futures Trading Commission and prohibits insider trading. Diana also noted that recent high-profile trading activity did not occur on Kalshi’s platform.