Sen. Elizabeth Warren (D-Mass.) isn't letting the prediction market insider trading question go. On Wednesday, she pointed to a Guardian report about traders who placed what she called “perfectly-timed” bets on U.S. military strikes in Iran back in February—and walked away with millions.
“Was that just luck? Looks like insider trading to me,” Warren said.
Blockchain analysis had previously flagged six suspected insider accounts that made $1.2 million at the exact moment of the U.S. strikes. Then, newly created anonymous accounts booked over $480,000 in profits by betting on a ceasefire before April 7. A recent report found that low-probability bets in war markets win at more than triple the rate prices suggest they should—a statistical red flag.
Warren has been on this case for a while. In March, she sent a letter to the Commodity Futures Trading Commission and the Office of Government Ethics, joined by 37 other lawmakers, urging a crackdown on illegal insider trading by federal employees in prediction markets.
Her concerns aren't hypothetical. Last month, a U.S. soldier was charged with using classified information to profit on a Polymarket bet tied to the capture of Venezuela's ousted leader, Nicolás Maduro.
The Senate itself has taken notice. Last week, it unanimously passed a resolution banning senators, officers, and staff from participating in prediction markets. Kalshi and Polymarket, the leading platforms, praised the move as a step toward building trust.
