WASHINGTON, D.C.—A pattern of suspiciously timed trades in futures and event-contract markets tied to major U.S. foreign actions and policy decisions has netted anonymous investors millions and warrants an immediate Commodity and Futures Trading Commission (CFTC) investigation, Democracy Defenders Fund (DDF) said in a letter filed today.

Recent news reports have identified traders placing well-timed bets on recent global events,  including Tuesday’s U.S.-Iran ceasefire, the initial strikes on Iran, the invasion of Venezuela, and changes in U.S. energy policy that have led to sizable profits. In a detailed letter to CFTC Division of Enforcement Director Avid I. Miller, DDF called for the commission to investigate whether traders used nonpublic government information for personal gain. An immediate investigation is doubly important given the implications for market integrity and national security.

"The prospect of government officials abusing the public trust to line their pockets using sensitive nonpublic information about war plans presents an unprecedented threat to our national security and the lives of our military members that cannot be left unchecked ," said Virginia Canter, DDF's chief counsel and director for ethics and anticorruption. "The fact that the White House itself felt compelled to issue a warning email to its entire staff last month explicitly citing to wagers placed on online prediction markets and the criminal penalties for using nonpublic information shows that this danger is real and already on the administration's radar. The CFTC must investigate. Not doing so is tantamount to consent."

DDF’s letter cited recent media reports revealing that anonymous traders reaped millions of dollars, including new traders on Polymarket who netted hundreds of thousands of dollars betting on the ceasefire in Iran. Other examples include anonymous traders reaping more than $400,000 on the capture of former Venezuelan President Nicolás Maduro and $1.2 million on the initial U.S. strike on Iran. Traders made bets within hours or minutes of those events becoming public. A subsequent burst of oil futures trades moments before President Trump announced a stand-down on Iranian energy infrastructure reportedly generated gamblers an estimated $580 million.

"The timing of these investments raises serious concerns about whether the trades were executed utilizing nonpublic government information," the letter states. The patterns "strongly suggest the possibility that a federal insider, whether in Congress or in the executive branch, may be using or sharing non-public information to game the futures markets."

DDF's formal request for investigation cites potential violations of the Commodity Exchange Act and other CFTC rules, including one that explicitly prohibits federal employees and members of Congress from using nonpublic government information for personal gain in futures, options, or swaps.

The letter notes that the suspicious trades also raise national security concerns. If a government official were positioned to profit from the timing of a military operation, they "might have altered the timing of the operation in order to make a profit," the letter states. Moreover, trading spikes could serve as signals to U.S. adversaries about imminent operations.

"The CFTC must prevent federal employees from trading on prediction markets and exclude political events from being eligible for trading on prediction markets," the letter states. "But the starting place for the CFTC's commitment … is not just through regulation: it is also through strong enforcement of the laws and regulations currently on the books."

Read the full letter HERE.

Read the fact sheet HERE.

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Democracy Defenders Fund brings together a nonpartisan team to work with national, state and local allies across the country to defend in real-time the foundations of our democracy.