A flurry of bets made prior to major announcements about the Iran war has ramped up speculation that individuals or groups with advance knowledge of U.S. military plans are cashing in on insider information.

And while prediction market platforms Polymarket and Kalshi now say they are taking more proactive measures designed to prevent such illicit activity, experts say there have been few signs so far that Trump administration regulators are cracking down.

“You need the deterrent factor that exists on the government side,” said Chris Ehrman, an attorney who previously served as head of the Commodity Futures Trading Commission’s whistleblower office. Without it, he said, simply allowing the platforms to self-regulate often amounts to “whipping them with a wet noddle.”

So far, the suspect bets have been largely concentrated on Polymarket, a platform that allows users to wager on the likelihood of certain events taking place. But in at least one case, speculation about a possible insider trade has migrated to a more traditional market.

The CFTC did not respond to a request for comment. In an interview this week with the Washington Reporter, an online conservative publication, CFTC Chairman Michael Selig pushed back on the idea that his office was not taking on the issue.

“There’s this false media narrative that CFTC-regulated markets are the Wild West and have no regulation and that’s blatantly false,” he said. “The CFTC uses complex surveillance tools and has seasoned career staff that pro-actively monitor these markets for insider trading and fraud.”

The CFTC recently issued guidance that reminded prediction market platforms of their responsibilities to limit insider trading.

Noah Solowiejczyk, a partner at law firm Fenwick & West and a former federal prosecutor, said the agency has recently shown signs it wants to take insider trading cases more seriously.

“I think you’ll see an enforcement action or prosecution happen” in an events-driven insider trading case, Solowiejczyk predicted.

Once relegated to the world of finance, insider has become a major topic in recent years as concerns about everything from politicians’ stock trades to professional athletes’ performances are now widely scrutinized for evidence of manipulation — fueled in part by the ongoing creep of investing and gambling onto smartphones and into everyday life.

Data suggests traders with advanced knowledge of geopolitical events may have collectively pocketed millions from recent bets on Polymarket. Last month, in the run-up to the latest round of American and Israeli attacks on Iran, some $529 million was traded on the platform tied to the timing of the strikes, Bloomberg News reported.

Earlier this week, analytics firm Bubblemaps said a series of connected Polymarket accounts had earned $1 million over the past two years predicting U.S. and Israeli strikes in the Middle East.

On Monday, approximately 15 minutes before President Donald Trump posted that there had been “productive” talks with Iran, stocks and oil futures trades on the main exchange run by longtime markets firm CME Group saw an unusual burst of volume compared to the relatively subdued backdrop seen the rest of that morning.

The bets predicted stocks would rise and oil prices would fall that day — precisely what happened once Trump made his announcement.

Depending on when they closed, the trades could have yielded millions — though shortly after Trump’s post, Iran denied there had been direct talks, and the market moves reversed somewhat.

Polymarket did not respond to a request for comment. A CME spokespersn declined to comment.

Solowiejczyk said the CFTC has likely been hampered by staffing shortages, which may be impacting its ability to take on new cases. Barron’s magazine recently reported that the CFTC has made significant cuts in its enforcement division, including the loss of all enforcement attorneys in its Chicago office.

It is not clear to what extent the anonymity that’s available to traders on Polymarket and Kalshi would hinder a federal investigation into illicit trading.

While part of Polymarket is registered in the U.S., making it subject to federal know-your-customer requirements, another part is registered in Panama — something that could make it harder to trace individuals making insider bets. Experts also say traders can circumvent geographic restrictions by using virtual private networks, or VPNs, that mask which country they are operating in.

So far, no American has faced federal charges in connection with insider trading on event-driven news. In February, Israel charged two of its military service members with using classified information to place bets on Polymarket related to unspecified combat operations.

Polymarket only recently began accepting trades from U.S.-based users, following an effort by the Trump administration to end a Biden-era push to restrict its use here.

Kalshi is fully registered in the U.S., and recently suspended an editor for influencer MrBeast in connection with alleged insider trading.

Many of the suspect bets on Polymarket are placed by accounts that are either new or solely focused on one specific outcome, further suggesting insiders could be behind them.

Even prior to the recent military operations and the accompanying suspicious bets, accusations of insider trading on Polymarket had begun to surface.

In January, a Polymarket user earned some $400,000 betting that then-Venezuelan President Nicolás Maduro would soon be out of office. One trader appeared to make approximately $1.2 million forecasting whom Google would announce as the most-searched people of 2025.

In response to a question about insider trading in November, Polymarket CEO Shayne Coplan told “60 Minutes” that “having an edge” is “a good thing.”

Coplan said that while he was focused on the ethics of insider transactions, it was “sort of an inevitability that this will happen, and there’s a lot of benefits from it.”

This week, Polymarket and Kalshi both unveiled measures designed to further crack down on insider trading.

Polymarket announced new rules explicitly stating users cannot act on insider information or trade on events whose outcome they could influence.

Kalshi said it was deploying technology that would “preemptively block politicians, athletes, and other relevant people” from trading in politics and sports markets. It also said it was adding a whistleblower function to its markets homepage that would allow users to flag potential violations.

A representative for Kalshi said the company has not been involved in the recent suspect trades. “We ban insider trading and enforce it,” a spokeswoman said in an email.

Polymarket, recently valued at $9 billion, counts Donald Trump Jr. as an investor. The president’s eldest son is also a strategic adviser to Kalshi, its top competitor.

White House representatives denied any wrongdoing originated from the administration and blasted insinuations that they were.

“All federal employees are subject to government ethics guidelines that prohibit the use of nonpublic information for financial benefit,” White House spokesman Kush Desai said in a statement.

“However, any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible reporting.”

“The President has no involvement in business deals that would implicate his constitutional responsibilities,” David Warrington, White House counsel, said in a statement. “President Trump performs his constitutional duties in an ethically sound manner and to suggest otherwise is either ill-informed or malicious.”

“Don does not interface with the federal government as part of his role with any company that he invests in or advises and has no influence or involvement with administration policies relating to prediction markets,” a representative for Donald Trump Jr. said in a statement.

Members of Congress have taken a more circumspect view of event-market platforms, putting forward legislation that would ban elected officials and government employees from using them and restricting the types of events, such as war or deaths, users can wager on.

The most recent bill, introduced by Sen. Chris Murphy, D-Conn., and Rep. Greg Casar, D-Texas, would ban trades on government actions, terrorism, war, assassination and events “where an individual knows or controls the outcome.”

“There’s no getting around the fact that any prediction market where somebody knows or controls the outcome of a bet is ripe for corruption,” Murphy said in a statement.

“Even worse, prediction markets are also an avenue by which government decisions get influenced by who’s making money off them, and that should be unforgivable to the American public,” he said.

President Donald Trump is used to bending financial markets to his will.

But with the war in Iran, he may have reached the limit of his ability to do so.

On Friday, the S&P 500 closed down 1.7% and notched its fifth-straight weekly decline, its worst stretch since 2022 and a sign of rapidly faltering confidence in a swift resolution to the Iran war.

Since the U.S. attacked Iran on Feb. 28, the S&P 500 has declined about 7%.

The Dow Jones Industrial Average fell 1.7% Friday and has lost nearly 4,000 points since the start of the war. It is now down more than 10% from its most recent high, a correction in technical terms.

The tech-heavy Nasdaq fell further into correction territory Friday, closing down 2% and off 13% since its record close in October.

Oil prices also rose sharply, with U.S. crude topping $100 a barrel and global Brent crude at approximately $114 at around 4 p.m. ET. The yield on the 10-year Treasury note surged to 4.4%, the highest since last summer. Some energy stocks, like Exxon, traded near all-time highs.

Shortly after stock markets had closed Thursday, Trump announced he was pausing attacks on Iranian energy sites for 10 days. But stocks barely budged.

Just days earlier, they had rocketed higher Monday when the president announced there had been “productive” talks with Iranian representatives, so he would pause strikes on Iranian power facilities for five days.

“The market is looking beyond commentary from the administration,” said Adam Turnquist, chief strategist at LPL Financial investment group, which manages nearly $2 trillion in assets. “They actually want concrete details and a resolution. And actions speak louder than words, that’s really present in [current] price action.”

This new reality stands in contrast to Trump’s ability to move markets throughout his first term and into the outset of his second.

Trump spent the better part of 2025 whipsawing traders via frequent changes regarding tariff levels. Eventually, a pattern emerged: The president would announce a new import duty, markets would fall, and Trump would usually end up reversing himself in some way.

The trend even got a nickname, coined by a columnist for the Financial Times: “TACO” — for “Trump Always Chickens Out.” (Last month, the Supreme Court struck down many of the tariffs.)

This time, the chain of events unleashed by Trump’s decision to attack Iran are such that a return to prewar conditions — and market levels — is virtually impossible in the short or even medium term, experts say.

The disruption to flows of oil and gas has been so substantial that transport costs, and ultimately the price paid per barrel, are likely to stay elevated indefinitely. Even when the Strait of Hormuz, which Iran has used as a chokepoint to drive concessions from the West, eventually reopens, the cost of transiting through it has likely gone up for the foreseeable future.

And the broader fallout on the economy and consumer purchases is already being felt.

That, in turn, has made interest rate cuts by the Federal Reserve less likely, because the higher oil costs are set to contribute to already sticky inflation. The odds of a rate hike before the end of the year have now outpaced the odds of a cut.

“Let’s say hostilities end tomorrow — the market will rally, but it’s not necessarily ripping back to where it was before because of the disruptions that have occurred,” said Steve Sosnick, chief strategist at Interactive Brokers financial group. “You’re not going to see oil go back to where it was immediately. You’re not going to see markets price in rate cuts the way they were before.”

White House spokesman Kush Desai said Friday that Trump “continues to be a powerful force driving the market’s confidence in the United States as the most dynamic, pro-business economy in the world.”

“Once the military objectives of Operation Epic Fury have been achieved and the market’s short-term disruptions are behind us, everyday investors are set to reap a windfall in a booming American economy,” Desai said.

A day earlier, the president said he was not concerned about the market’s recent performance.

Oil prices “have not gone up as much as I thought, Scott, to be honest with you,” he said during a Cabinet meeting, addressing Treasury Secretary Scott Bessent. “It’s all going to come back down to where it was and probably lower.”

Markets have not fallen further because the outlook for earnings growth remains bullish, Turnquist said — though that could change the longer the conflict drags on and further impinges on consumer spending and business investment.

And compared to prior oil shocks, the U.S. economy is less oil-intensive, as it has transitioned to one that is largely service-oriented. Global oil markets have also been supported by America’s oil production boom over the past decade — with more supplies online, overall prices are less likely to rise as much.

Yet by some metrics, stocks were already considered expensive prior to the hostilities. Having already contended with stretched valuations, traders may find it much harder to power stock prices back to the record levels seen just prior to the start of the latest conflict.

“The risk-reward is still very heavily weighted toward [the] risk” of further stock-price declines,” said Matt Maley, chief market strategist at Miller Tabak financial group.

Should hostilities persist, Trump’s ability to influence markets will only further erode, Sosnick predicted.

“He now realizes he’d like to jawbone his way out of it, but it’s not that easy at this point because the situation encompasses so many moving parts and difficult variables,” Sosnick said. “It doesn’t lend itself to a quick set of comments mollifying investors.”