US Lawmaker Targets Prediction Market Exploitation After Venezuela Strike

The US military operation in Venezuela has triggered a financial scandal beyond geopolitics. Representative Ritchie Torres (D-NY) is drafting legislation to curb insider trading in prediction markets after blockchain analysts uncovered suspicious bets on Polymarket tied to Nicolás Maduro’s capture.

Three newly created wallets placed $34,000 in wagers forecasting Maduro’s arrest hours before the January 3 raid, netting $630,848 in profits. The largest single gain reached $409,900—a 1,200% return. Lookonchain’s forensic report suggests preemptive positioning atypical of retail speculation.

The episode exposes vulnerabilities in decentralized betting platforms. Unlike regulated markets, prediction markets lack mechanisms to freeze suspicious trades or mandate disclosures. Torres’ bill aims to close this gap by applying SEC-style oversight to event contracts.

Meanwhile, the DOJ unsealed indictments against Maduro and his wife Cilia Flores for alleged narcoterrorism. The administration claims the operation dismantled a ‘cartel government,’ but critics warn it sets precedent for extrajudicial regime change.