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The White House last month warned staff in an email not to make prediction markets bets related to the Iran war, a Trump administration official confirmed Friday.
The warning came amid increasing concern about insider trading on prediction markets such as Polymarket after a series of suspiciously timed trades around the Iran war, and on the U.S. ouster of Venezuelan President Nicolás Maduro earlier this year.
The Wall Street Journal first reported on the March 24 email to White House staff.
That email was sent a day after President Donald Trump announced a pause in hostilities in a post on the social media site Truth Social.
In the 15 or so minutes before that post, there was a flurry of unusual activity on oil and stock futures markets. More than $500 million in crude oil futures trades were made in that narrow time window, Reuters reported.
Two Democratic senators, in a letter Friday to the chairman of the Commodity Futures Trading Commission, said the same pattern appears to have recurred Tuesday, “in the hours before President Trump announced a two-week ceasefire with Iran – an announcement that sent oil prices down approximately 15 percent.”
On that day, “traders placed an approximately $950 million bet on oil prices falling,” Sen. Elizabeth Warren of Massachusetts and Sen. Sheldon Whitehouse of Rhode Island wrote in a letter asking CFTC Chair Michael Selig to open an investigation into the unusual trading.
“This pattern raises serious questions about whether there has been recurring misappropriation of material nonpublic government information and about the extent to which individuals inside or outside the government have acted on such information,” Warren and Whitehouse wrote.
On Wednesday, Rep. Ritchie Torres, a New York Democrat, sent a separate letter to Securities and Exchange Commission Chair Paul Atkins and Selig requesting a federal insider trading probe.
“What kind of trader would make a massive trade at 6:49 a.m., 15 minutes before a market-moving presidential announcement with billions of dollars at stake and without a hedge?” Torres said in an interview with CNBC on Wednesday.
“The only plausible answer to that question is an insider trader,” Torres said. “Any other alternative is a statistical impossibility.”
The White House, asked for comment about the Journal’s report, did not deny that staff were sent the warning on making prediction market bets on Iran, but noted that all federal employees are barred from trading or placing bets on inside information.
“Any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible reporting,” White House spokesman Davis Ingle said in an email to CNBC on Friday.
“President Trump has been crystal clear: while he seeks a strong and profitable stock market for everyone, members of Congress and other government officials should be prohibited from using nonpublic information for financial benefit,” Ingle said.
The surge in popularity of prediction markets, including Kalshi and Polymarket, has been accompanied by growing questions about proper regulation and the potential for insider trading.
Kalshi and Polymarket both announced they were tightening rules around insider trading on their platforms in separate statements released March 23.
Disclosure: CNBC and Kalshi have a commercial relationship that includes a CNBC minority investment.
