From cryptocurrency-based online platforms to oil futures and the United States S&P 500 stock benchmark, traders have placed bets worth hundreds of millions of dollars since the start of the US-Israeli war on Iran. These bets were suspiciously well-timed, suggesting potential knowledge of key White House decision-making, with researchers documenting numerous examples of anonymous accounts making accurate predictions just before critical events.
One of the most well-documented cases involves Polymarket, a platform that allows users to anonymously bet on event outcomes without identity verification. Polymarket gained mainstream attention during the 2024 US presidential election but has become synonymous with suspected insider trading since January, following well-timed bets on US plans regarding Venezuela and the subsequent war with Iran. Independent on-chain analyst Andrew 10 GWEI told Al Jazeera about a "striking" example: 38 accounts, believed to belong to one individual, netted over $2 million by correctly betting on the February 28 strikes that initiated the conflict.
Suspicious activity has not been limited to fintech platforms; a series of well-timed Wall Street trades last week also raised eyebrows and questions about possible insider trading. All these trades occurred early on Monday before US markets opened, coinciding with Trump's announcement on Truth Social that he was delaying threatened attacks on Iranian energy infrastructure after what he described as "VERY GOOD AND PRODUCTIVE CONVERSATIONS" with Tehran. In the 15 minutes before the announcement, trading spiked, with $580 million worth of oil contracts exchanged, and the S&P 500 e-Mini futures saw a surge in pre-trading volume.
US economist and Nobel laureate Paul Krugman took a harsher view, writing on Substack that there was an "obvious explanation" for Monday's otherwise "baffling" trades. He argued, "Somebody close to Trump knew what he was about to do, and exploited that inside information to make huge, instant profits," stating that this amounted to more than simple insider trading. Krugman added, "We have another word for situations in which people with access to confidential information regarding national security – such as plans to bomb or not to bomb another country – exploit that information for profit. That word is 'treason'."
The White House did not immediately respond to Al Jazeera's request for comment, but a White House spokesperson told the Financial Times this week that the administration does not "tolerate any administration official illegally profiteering off of insider knowledge" and dismissed accusations of insider trading as "baseless and irresponsible reporting." Amid growing scrutiny, members of the Democratic Party have called for increased regulation of prediction sites like Polymarket, with Senator Chris Murphy introducing the BETS OFF Act in Congress to prohibit bets on government actions, war, and similar events.
In response to the controversy, both Polymarket and its competitor Kalshi have taken steps to address insider trading concerns. Polymarket updated its rules to clarify prohibitions on trading based on stolen confidential information or by individuals who could influence outcomes, while Kalshi announced new technological measures to block politicians and other relevant persons from trading in certain markets. However, critics like Democratic Representative Alexandria Ocasio-Cortez argued that these changes are insufficient, tweeting that more comprehensive action is needed to prevent exploitation of insider information by a wide range of individuals connected to government decisions.
Source: www.aljazeera.com