White House warned staff on Iran war prediction market bets
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A Trump administration official confirmed Friday that the White House warned staff in an email last month not to bet on prediction markets about the Iran war.
The warning comes as concerns about insider trading on prediction markets such as Polymarket follow a series of questionably timed trades related to the Iran war and the US impeachment of Venezuelan President Nicolás Maduro earlier this year.
Wall Street Journal’s first news In an email sent to White House staff on March 24.
The email was sent a day after President Donald Trump announced a cessation of hostilities in a post on his social media site. Real Social.
About 15 minutes before this post, there was unusual activity on the site. oil and stock futures markets. More than $500 million worth of crude oil futures were traded in this tight time frame. Reuters reported.
The same pattern was repeated Tuesday “in the hours before President Trump announced a two-week ceasefire with Iran (an announcement that caused oil prices to fall approximately 15 percent),” two Democratic senators said in a letter to the chairman of the Commodity Futures Trading Committee on Friday.
That day, “traders placed approximately $950 million in bets on falling oil prices,” Sen. Elizabeth Warren of Massachusetts and Sen. Sheldon Whitehouse of Rhode Island wrote in a letter asking CFTC Chairman Michael Selig to launch an investigation into the unusual trading.
“This pattern raises serious questions about whether important nonpublic government information is repeatedly misused and the extent to which individuals inside or outside government act on the basis of that information,” Warren and Whitehouse wrote.
On Wednesday, Rep. Ritchie Torres, a New York Democrat, sent a separate letter to Securities and Exchange Commission Chairman Paul Atkins and Selig requesting a federal insider trading investigation.
“What kind of trader would place a massive trade at 6:49 a.m., 15 minutes before a market-moving presidential announcement, with billions of dollars at stake and without any protection?” Torres asked this question in an interview with CNBC on Wednesday.
“The only reasonable answer to this question is an insider trader,” said Torres. “Any other alternative is statistically impossible.”
Asked to comment on the Journal’s report, the White House did not deny that its staff had been warned about making prediction market bets on Iran, but noted that all federal employees are prohibited from trading or placing bets based on inside information.
“Any insinuation that administration officials engaged in such activity without evidence is baseless and irresponsible reporting,” White House spokesman Davis Ingle said in an email to CNBC on Friday. he said.
“President Trump has been very clear: While we seek a strong and profitable stock market for everyone, members of Congress and other government officials must be prohibited from using nonpublic information for financial gain,” Ingle said.
The rise in popularity of prediction markets, including Kalshi and Polymarket, is accompanied by increasing questions about appropriate regulation and the potential for insider trading.
Kalshi and Polymarket, both Tightening rules on insider trading in separate statements published on their platforms on the same day in March.
