Last Saturday, while world markets were closed, President Donald Trump issued an incendiary threat to Iranian leaders: Open the Strait of Hormuz within 48 hours or the United States would “obliterate” the country’s power plants.
Then, shortly before U.S. traders returned to work on Monday, Trump backed off the bluster, posting that the U.S. and Iran had, over the weekend, engaged in “VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST.”
Markets, predictably, rallied on the news. The timing of both announcements reeked of manipulation, but, more damning, an extraordinary volume of unusual trades appeared on oil futures markets shortly before Trump’s second post walking back his threat.
Former Labor Secretary Robert Reich noted trades in crude oil contracts on the New York Mercantile Exchange, West Texas Intermediate futures, contracts for Brent crude, as well as some $1.5 billion in S&P futures contracts — all made roughly 15 minutes before Trump issued his statement. Nobel Prize-winning economist Paul Krugman spotlighted the activity in a Substack post. “People close to Trump are trading based on national secrets,” he wrote.
Who profited from the trades? That’s what Sens. Chris Murphy (D-Conn.) and Andy Kim (D-N.J.) would like to know. “[A] $1.5 BILLION BET. Bigger than any futures purchases made at the time. 5 minutes before Trump’s post. Who was it? Trump? A family member? A White House staffer?” Murphy posted. “This is corruption. Mind blowing corruption.”
Kim echoed the sentiment in his own post: “Someone made a fortune,” he wrote. “We need immediate investigations into these trades.”
The trades followed a now-familiar pattern, and one observed around other big news events like Trump’s ever-shifting of tariff policies or the extrajudicial kidnapping of Venezuelan President Nicolas Maduro. One trader made $400,000 on a Polymarket bet that Maduro would be removed from power.
The body tasked with policing insider trading on futures markets and prediction markets like Polymarket and Kalshi is the Commodity Futures Trading Commission — but don’t expect the CFTC to bring the hammer down anytime soon.
Under the Biden administration, the agency was beginning to scrutinize the legality of markets like Kalshi and Polymarket: In 2022, the CFTC fined Polymarket $1.4 million for operating as an unregistered commodities market, and banned the company from operating in the U.S. It went to court in an attempt to stop Kalshi, which was registered, from accepting bets that were based on the outcome of political events.
But when Trump took office in 2025, the CFTC’s posture dramatically changed. It dropped its effort to stop Kalshi from offering bets on political events, as well as its investigation into Polymarket, welcoming the prediction market back to the U.S. (Both Kalshi and Polymarket named Donald Trump Jr. as an adviser to their companies the same year.)
The CFTC did not respond to questions from Rolling Stone about whether it intends to investigate the mysterious trades made around Trump’s Monday announcement.
Investigations into insider trading generally have ground to a halt under Trump. At the CFTC’s sister agency, the Security and Exchange Commission, enforcement dropped to its lowest level on record during Trump’s first term in office, and plunged again when Trump returned to the White House in 2025. Just last week, the SEC’s top enforcement officer Margaret Ryan abruptly resigned, with CNBC reporting Ryan “clashed with agency leaders over the direction of its enforcement program, including the handling of cases with ties to President Donald Trump and his family.” (Ryan declined to comment to Rolling Stone.)
Kalshi and Polymarket this week rushed to address growing outrage about insider trading on their platforms, amid nascent efforts in the Senate and House to crack down on such practices.
Polymarket, where one trader pocketed $1 million on Iran-related bets, said it was updating its own rules to prohibit trading “on stolen confidential information,” “illegal tips,” or on any events of which the user might be able to “influence the outcome.” Kalshi meanwhile announced it would ban both politicians from trading on their own campaigns, and anyone involved in college or professional sports from betting on the sports in which they are involved.
Members in the House introduced the PREDICT Act, short for Preventing Real-time Exploitation and Deceptive Insider Congressional Trading, on Wednesday. The bill would bar members of both Congress and the executive branch, including the president, as well as their family members and senior staff, from betting on events
Rep. Nikki Budzinski (D-Ill.), who is co-sponsoring the legislation with Rep. Adrian Smith (R-Neb.) tells Rolling Stone, that when the U.S. struck Iran, “We realized that there were a very small handful of new Polymarket traders that got online with very precise information — perhaps information that might not otherwise be known unless you were within government, in a senior level role — and to know that those people benefited from a military strike by our own country to the tune of over a million dollars, it led us to expediting filing this legislation.”
Trump’s CFTC, meanwhile, appears to be sitting on its hands.
