Last Saturday, while the world markets were closed, President Donald Trump issued a serious threat to the leaders of Iran: Open the Strait of Hormuz within 48 hours or the United States will “destroy” the country’s energy plants.
Then, shortly before American traders returned to work on Monday, Trump backed away from that weakness, announcing that the US and Iran, over the weekend, had “GOOD AND EFFECTIVE DIALOGUES REGARDING THE COMPLETE AND FINAL RESOLUTION OF OUR MIDDLE EAST STUDIES.”
Markets, unexpectedly, rallied on the news. The timing of both announcements was made clear by fraud, but, even more alarmingly, a surprising number of unusual trades appeared in the oil futures markets shortly before Trump’s second post backpedaled his threat.
Former Secretary Robert Reich oversaw trading in crude oil contracts on the New York Mercantile Exchange, West Texas Intermediate futures, Brent crude contracts, as well as $1.5 billion in S&P futures contracts — all done 15 minutes before Trump delivered his statement. Nobel Prize-winning economist Paul Krugman highlighted this phenomenon in a post on Substack. “People close to Trump are selling out national secrets,” he wrote.
Who benefited from the trade? That’s what Sens. Chris Murphy (D-Conn.) and Andy Kim (DN.J.) want to know. “[A] $1.5 BILLION BIG. It is greater than the future purchases at that time. 5 minutes before Trump’s post. Who was he? Trump? A family member? White House job?” Murphy wrote. “This is corruption. Mind-numbing corruption. ”
Kim echoed his sentiments in his post: “Someone made a fortune,” he wrote. “We need an immediate investigation into these activities.”
Businesses followed the usual pattern, and one saw in some major news events such as Trump’s change of tax policies or the arbitrary kidnapping of the President of Venezuela Nicolas Maduro. One trader made a $400,000 bet on Polymarket that Maduro would be removed from power.
The body tasked with policing insider trading in futures and prediction markets like Polymarket and Kalshi is the Commodity Futures Trading Commission — but don’t expect the CFTC to bring down the hammer anytime soon.
Under the Biden administration, the agency had begun to scrutinize the validity of markets such as Kalshi and Polymarket: In 2022, the CFTC fined Polymarket $1.4 million for operating as an unregistered commodity market, and banned the company from operating in the United States.
But when Trump took office in 2025, the CFTC’s position changed dramatically. It dropped its efforts to prevent Kalshi from giving bets at political events, as well as its investigation into Polymarket, to accept the prediction market back to the US (Kalshi and Polymarket named Donald Trump Jr. as an adviser to their companies in the same year.)
The CFTC did not respond to inquiries from Rolling Stone about whether it intends to investigate the mysterious business that took place around Trump’s Monday announcement.
Investigations into insider trading are generally on the verge of stopping under Trump. At the CFTC’s sister agency, the Securities and Exchange Commission, enforcement activity has fallen to its lowest level during Trump’s first term, and will fall again when Trump returns to the White House in 2025. Just last week, the SEC’s top director, Margaret Ryan, resigned abruptly, with CNBC reporting Ryan’s leaders “struggle with the administration’s handling of the regulatory process.” The process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process of the process. relations with the President Donald Trump and his family. (Ryan declined to comment on Rolling Stone.)
Kalshi and Polymarket this week have been quick to address growing outrage over insider trading on their platforms, amid efforts launched in the Senate and House to curb such practices.
Polymarket, where one trader invested $1 million in a bet linked to Iran, said it was updating its rules to prevent trading “with stolen confidential information,” “illegal tips,” or in any cases where the user could “influence the outcome.” Meanwhile, Kalshi has announced that it will ban both politicians from doing business with their campaigns, and anyone involved in college or professional sports from betting on the games they are involved in.
House members introduced the PREDICT Act, short for Preventing Real-Time Use and Fraudulent Insider Congressional Trading, on Wednesday. The bill would prohibit members of 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 sponsors the legislation and Rep. Adrian Smith (R-Neb.) Rolling Stone, that when the US hit Iran, “We realized that there are new Polymarket traders who have arrived online with the right information – perhaps information that would not otherwise be known unless you were inside the government, in a high position – and knowing that those people benefited from the military attack on our country to the tune of more than a million dollars, led us to accelerate the introduction of this law.”
Trump’s CFTC, for now, appears to be sitting on its hands.
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