White House Warns Staff Against Futures Market Betting Amid Insider Trading Fears

The White House has warned staff members about using their roles in the federal government to bet on futures markets. The warning came in an email to staff on March 24 following a pause in strikes against Iran. Despite the warning, three accounts apparently scored over $600,000 by correctly predicting the current ceasefire.

Sen. Richard Blumenthal (D) and Sen. Andy Kim (D) have introduced a bill to ban prediction markets related to war and military action. The bill, titled the Prediction Markets Security and Integrity Act, aims to put guardrails on the industry and ban dangerous and unethical bets.

Recent controversies in the prediction market industry have involved alleged cases of insider trading. In March, authorities arrested an Israeli Air Force reservist for using classified information to profit on prediction markets to the tune of $128,000. Additionally, suspicious wagering on the prospects of Iranian Supreme Leader Ayatollah Ali Khamenei remaining in power also came to light, with likely insiders wagering seven-figures just before U.S. airstrikes killed Khamenei. Crypto-analytics firm Bubblemaps outlined “six suspected insiders” who wagered $1.2 million on a US strike by Feb. 28 on Polymarket. In December, a user also apparently won 22 of 23 bets on the platform for more than $1 million, all in a single day.