Trump Administration Warns Staff Against Insider Trading on Iran War Prediction Markets

The Trump administration issued a rare warning to White House staff against using insider information to place bets on prediction markets.

The warning came a day after President Trump announced a pause in strikes on Iran.

BBC

In the 15 minutes before that announcement, more than $760 million worth of oil futures contracts changed hands.

Three Polymarket accounts raked in over $600,000 by correctly betting on the timing of the ceasefire.

Two Democratic senators wrote to the CFTC demanding an investigation into recurring patterns of suspicious trades.

Prediction markets like Polymarket and Kalshi allow users to bet on everything from politics to sports.

The surge in wartime wagers has fueled concerns about insider trading.

CBS News

Polymarket was banned in the U.S. in 2022 but has sought to reenter after acquiring a CFTC-licensed exchange.

Kalshi is federally regulated and has leaned heavily into sports betting.

Critics argue the audit system is fundamentally broken because it relies on announced inspections and documents rather than worker testimony.

Lawmakers from both parties have introduced legislation to regulate prediction markets.

California Gov. Gavin Newsom banned state-appointed officials from using the markets.

Rep. Seth Moulton blasted a Polymarket contract linked to a US service member rescue as DISGUSTING.

Sens. Richard Blumenthal and Andy Kim introduced legislation to ban markets related to war or military action.

Donald Trump Jr. is an investor in Polymarket and a paid adviser to Kalshi.

Oil markets reacted with a sharp gap emerging between futures prices and the actual price of oil in the spot market.

Brent dated prices rose above $140 per barrel, the highest level since 2008.

CNN

Kalshi data showed the odds of restoring navigation through the Strait of Hormuz by May 15 remained steady at around 14%.

Polymarket odds of ending the conflict by May 15 rose to 28% from 25%.

These indicators reflect a state of deep uncertainty in the markets.