“Men do not make laws,” goes a maxim attributed to US president Calvin Coolidge. “They do but discover them.”
If that’s true, then the US attack on Venezuela just uncovered a legislative mother lode. A new law proposed by New York representative Ritchie Torres on Monday would make it illegal for government employees with access to nonpublic information from trading on prediction markets like Polymarket and Kalshi.
If that sounds like something that should probably already be illegal, Coolidge might agree, in his own laissez-faire way.
“Laws must be justified by something more than the will of the majority,” he concluded. “They must rest on the eternal foundation of righteousness.”
In any case, the “Public Integrity in Financial Prediction Markets Act of 2026,” would include new restrictions on elected officials, political appointees, and executive branch staffers, according to Forbes. It would also apply to government employees who have not yet been privy to nonpublic documents, but “may reasonably obtain such material nonpublic information in the course of performing official duties.”
The proposed legislation comes on the heels of compelling evidence that someone with inside information about the recent kidnapping of Venezuelan president Nicolás Maduro placed a series of large bets on Polymarket on whether an attack would take place. Just two days before the surprise attack, the account in question invested over $30,000 in a prediction that either Maduro would be “out” or that US troops would set foot “in Venezuela by” January 31st.
The payout was staggering: a profit of $400,000 in less than 24 hours, as sports entrepreneur Joe Pompliano estimated.
“Seems pretty suspicious!” Pompliano wrote. “Insider trading is not only allowed on prediction markets; it’s encouraged.”
Beyond the Venezuela attack, prediction markets have raised serious anxiety about geopolitical strife around the world. Recent advances in the sector have made it so that crypto bros can gamble on deadly conflicts in real-time, betting thousands of dollars on questions like “will Russia capture all of Kupiansk by March 31?”
Back in October, Reuters reported that the Trump Media and Technology Group was working with Crypto.com to implement prediction market functionality into Truth Social. That came as dozens of federal investigations into crypto-based price fixing, securities fraud, and regulatory noncompliance have been dropped at the Trump administration’s urging. Two of those cases were against prediction platforms Polymarket —the very same implicated in the Venezuela allegations — and Kalshi, for selling options contracts related to congressional elections.
Whether Torres’ new bill makes it very far remains to be seen. Recent history shows that Congress has little appetite for regulation of insider trading — and for now, there doesn’t yet seem to be a wager on the outcome of the bill on either Polymarket or Kalshi.
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