Prediction markets hit ₱1.45 trillion ($25 billion) as insider trading fears grow
Prediction market volumes hit ₱1.45 trillion ($25 billion) in January across Kalshi and Polymarket, nearly quintupling since the 2024 US Presidential election. A brand-new Polymarket account that bet over $30,000 on Venezuelan President Nicolás Maduro's ouster hours before his capture walked away with over $436,000.
A brand-new Polymarket account bet over $30,000 on Venezuelan President Nicolás Maduro's ouster just hours before his capture, collecting over $436,000 in total payouts. That suspicious timing illustrates the insider trading problem now plaguing prediction markets as they explode in popularity — Kalshi and Polymarket combined for ₱1.45 trillion ($25 billion) in volume during January alone, nearly quintupling since the 2024 US Presidential election.
The platforms have become betting parlors for everything from Federal Reserve decisions to whether Jesus Christ will return by 2027. Traders wagered ₱638.84 million ($11 million) on the Fed's next meeting outcome and ₱1.74 billion ($30 million) on the second coming. Someone even put $113 million on which song Bad Bunny would open with at the Super Bowl halftime show in February.
New York Representative Ritchie Torres called the intersection of prediction markets and federal government "the most corrupt corner of Washington, D.C." where insider trading and self-dealing are no longer imagined risks but demonstrated dangers. He co-sponsored the Public Integrity in Financial Prediction Markets Act of 2026 with Democrats to address the problem.
The CFTC banned insider trading in commodities markets back in 2010 through what it calls the "Eddie Murphy rule" — named after the 1983 film "Trading Places" where characters profit from a stolen Agriculture Department crop report. But experts say prediction markets blur the line between diligent research and illegal information sharing. Vanderbilt Law School Associate Dean Yesha Yadav said the clarity of legal rules and understanding how broadly the law reaches in this context remains unclear.
Kalshi CEO Tarek Mansour defended his platform when asked if a Bad Bunny dancer betting on the halftime song would constitute insider trading. He argued that if people consider song selection nonmaterial, nonpublic information that's okay to divulge beforehand, then it's totally fair game. UCLA Business Law Program Co-Director Andrew Verstein pointed out the core challenge: distinguishing between someone with their own satellite analyzing crops legally versus someone with a friend at the Agriculture Department leaking frozen orange juice futures data. CFTC Chief Gary Gensler cited "Trading Places" when the Murphy rule was established in 2010.
This article was written based on reporting from Dlnews.
