Samuel Boivin Nurfoto | getty images
The White House warned staffers in an email last month not to place bets in the Iran war-related prediction market, a Trump administration official confirmed on Friday.
The warning comes amid growing concern about insider trading on prediction markets such as Polymarket, following a series of suspiciously timed trades around the Iran war, and following the U.S. ouster of Venezuelan President Nicolas Maduro earlier this year.
The Wall Street Journal first reported In a March 24 email to White House staff.
That email was sent a day after President Donald Trump announced a halt to hostilities in a post on the social media site true social.
In the preceding 15 minutes or so after that post, there was a flurry of unusual activity Oil and stock futures markets. More than $500 million was traded in crude oil futures trading in that limited time period, Reuters has reported.
“The same pattern appears to have been repeated on Tuesday,” two Democratic senators said in a letter Friday to the chairman of the Commodity Futures Trading Commission, just hours before President Trump announced a two-week ceasefire with Iran — an announcement that sent oil prices down nearly 15 percent.
That day, “traders bet approximately $950 million on falling oil prices,” Senator Elizabeth Warren of Massachusetts and Senator Sheldon Whitehouse of Rhode Island wrote in a letter asking CFTC Chairman Michael Selig to launch an investigation into the unusual trading.
Warren and Whitehouse wrote, “This pattern raises serious questions about whether there has been repeated misuse of material nonpublic government information and the extent to which individuals inside or outside the government have acted on such information.”
On Wednesday, New York Democrat Representative Ritchie Torres sent a separate letter to Securities and Exchange Commission Chairman Paul Atkins and Selig requesting a federal insider trading investigation.
“What kind of trader, with billions of dollars at stake and no hedge, would make a massive trade at 6:49 a.m. 15 minutes before a market-changing presidential announcement?” Torres asked in an interview with CNBC on Wednesday.
“The only plausible answer to that question is an insider trader,” Torres said. “Any other option is a statistical impossibility.”
Asked for comment about the Journal’s report, the White House did not deny that employees were sent warnings about placing prediction market bets on Iran, but noted that all federal employees are barred from trading or betting on inside information.
“Any implication 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.
Ingle said, “President Trump has been crystal clear: While he wants a strong and profitable stock market for all, members of Congress and other government officials should be prohibited from using non-public information for financial gain.”
With the rise in popularity of prediction markets, including Kalshi and Polymarket, there are also growing questions about proper regulation and the possibility of insider trading.
Kalshi and Polymarket both announced that they are doing so tightening insider trading rules on their platforms in separate statements issued on the same day in March.