A wave of perfectly timed bets set off the loudest fight yet over insider trading on prediction markets

A wave of perfectly timed bets placed just before the removal of Nicolás Maduro set off the loudest fight yet over insider trading on prediction markets.

Lawmakers started asking how traders could place massive wagers seconds before real-world events without inside access.

For Tre Upshaw, the backlash was not a warning, but a signal. He used to trade meme coins back in the day, and has now created a tool called Insider Finder. It runs inside his data terminal, Polysights.

The software allegedly scans Polymarket for large and unusual trades tied to prediction contracts. It flags dozens of suspicious moves every day, and the activity shows up before headlines break. In stock markets, this kind of behavior would bring criminal charges. In this market, it does not.

Traders exploit gaps regulators have not closed

Upshaw’s work mirrors what regulators already do in stocks and bonds. In those markets, using non‑public information is illegal. In prediction trading, the rules are thin.

The Commodity Futures Trading Commission (CFTC) oversees these platforms in the United States. The agency has taken a light approach. It has said little about insider trading. No enforcement wave has followed. Few expect one under Donald Trump’s administration, which has avoided tighter financial oversight. Donald Trump Jr. advises Polymarket and is a partner at 1789 Capital, a venture firm backing the platform.

Supporters of prediction market gambling argue that they work better because insiders participate. They say people with early knowledge risk real money and sharpen signals. Venezuela contracts showed movement before the news broke. Traders saw it. The market reacted. The signal spread fast.

Pressure is building anyway. Representative Ritchie Torres of New York pushed a bill last week. The proposal blocks federal officials from trading prediction contracts tied to policy if they hold or could access confidential information. The bill gained co‑sponsors quickly.

Polymarket stands out because it runs on crypto rails. Every trade is written to a public blockchain. That transparency let Upshaw build Insider Finder. He did not need permission. The data is open. The trades stay visible forever.

Rival platform Kalshi works differently. It does not run fully on blockchain. It does not show account‑level records publicly.

A Kalshi spokesperson reportedly said the platform verifies user identities, flags risky behavior, and sends all trades to the CFTC. Kalshi chief executive Tarek Mansour said after the Venezuela strikes that the platform bans manipulation. “The reason why it’s actually not allowed is because it makes the game unfair,” he said on a podcast.

Polymarket sits in a legal gray zone even after receiving unexpected funding from Intercontinental Exchange, so its main exchange operates outside the United States, as residents remain banned. Because of that, Polymarket does not run identity checks. The loophole remains open. The prediction money keeps moving.