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The White House warned staff in an email last month against betting on prediction markets related to the Iran war, a Trump administration official confirmed Friday.
The warning comes amid growing concerns about insider trading in prediction markets such as Polymarket following a series of suspicious timing trades surrounding the Iran war and the U.S. ouster of Venezuelan President Nicolas Maduro earlier this year.
The Wall Street Journal first reported on the March 24 email to White House staff.
The email was sent a day after President Donald Trump announced a suspension of hostilities in a post on the social media site Truth Social.
About 15 minutes before that post, a flurry of unusual activity occurred. oil and the stock futures market. According to Reuters, more than $500 million worth of oil futures contracts were traded in that narrow time frame.
The same pattern appears to have recurred on Tuesday “hours before President Trump announced a two-week cease-fire with Iran,” two Democratic senators said in a letter to the chairman of the Commodity Futures Trading Commission on Friday, noting that the announcement caused oil prices to fall by about 15%.
On the same day, Sens. Elizabeth Warren of Massachusetts and Sheldon Whitehouse of Rhode Island called on CFTC Chairman Michael Selig to launch an investigation into the irregular trades, saying, “Traders placed approximately $950 million in bets that oil prices would fall.”
“This pattern raises serious questions about the repeated misappropriation of sensitive nonpublic government information and the extent to which individuals inside and outside the government acted on such information,” Warren and the White House said in a statement.
On Wednesday, New York Democratic Rep. Richie Torres sent another letter to Securities and Exchange Commission Chairman Paul Atkins and Mr. Selig requesting a federal insider trading investigation.
“What kind of trader would make a huge, unhedged trade with billions of dollars at 6:49 a.m., 15 minutes before a market-moving presidential announcement?” Torres said in an interview with CNBC on Wednesday.
“The only plausible answer to that question is insider traders,” Torres said. “No other option is statistically possible.”
Asked for comment on the paper’s report, the White House did not deny that its staffers had been warned to bet on prediction markets about Iran, but noted that all federal employees are prohibited from trading or betting on inside information.
“Any suggestion that administration officials are engaging in such activity without evidence is baseless and irresponsible reporting,” White House press secretary Davis Ingle said in an email to CNBC on Friday.
“President Trump wants a strong and profitable stock market for everyone, but he has made clear that members of Congress and other government officials should be prohibited from using nonpublic information for economic gain,” Ingle said.
With the growing popularity of prediction markets such as Calci and Polymarket, questions about appropriate regulation and the possibility of insider trading are also increasing.
Calci and Polymarket both announced in separate statements on March 23 that they would be tightening rules regarding insider trading on their platforms.
Disclosure: CNBC and Kalsi have a commercial relationship that includes a minority investment in CNBC.
