Congressman Introduces Legislation To Criminalize Insider Trading On Prediction Markets

Ritchie Torres has introduced a bill to ban government officials from using insider information to trade on political prediction markets like Polymarket. The bill was prompted by reports that traders on Polymarket made large profits betting on Nicolas Maduro's removal, raising suspicions that some wagers were placed using material non-public information. "While such insider trading in capital markets is already illegal and often prosecuted by the Justice Department and Securities and Exchange Commission, online prediction markets are far less regulated," notes Axios. From the report: Rep. Ritchie Torres' (D-N.Y.) three-page bill, a copy of which was obtained by Axios, is called the Public Integrity in Financial Prediction Markets Act of 2026. It would ban federal elected officials, political appointees and bureaucrats from making insider trades on prediction sites sites such as Polymarket. Specifically, the bill prohibits such government officials from trading based on information that is not publicly available and that "a reasonable investor would consider important in making an investment decision." [...] It's not clear if House Speaker Mike Johnson (R-La.) would put Torres' bill to a vote in the House or if President Trump would sign it. "We're looking at the specifics of the bill, but we already ban the activity it cites and are in support of means to prevent this type of activity," said Elisabeth Diana, a spokesperson for the prediction website Kalshi. Diana added that the "activity from the past few days" did not occur on their platform.

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