Prediction markets need regulation to prevent insider trading on classified military operations
Source: John Cassidy. "How to Prevent Insider Trading on Trump’s Wars | The New Yorker." March 9, 2026. www.newyorker.com
The Gist
People with inside knowledge of secret military operations are making huge profits by betting on prediction websites before attacks happen. These websites should be regulated to require real identities and prevent this illegal insider trading, but the current administration won't act because of conflicts of interest.
Conclusion
Prediction markets like Polymarket should be properly regulated with know-your-customer rules and oversight to prevent insider trading on classified information, particularly regarding military operations
Premises
- Anonymous accounts made large profits betting on U.S. military strikes against Iran and Venezuela with suspicious timing, suggesting insider knowledge
- Current prediction market platforms operate offshore and use crypto anonymity to evade U.S. regulations and know-your-customer laws
- Military operations involve informing many people across military chains of command, creating numerous potential insiders with classified information
- Using classified information for profit is already illegal under U.S. law, but enforcement is nearly impossible on anonymous crypto platforms
- The Trump administration has conflicts of interest with prediction markets, as Donald Trump Jr. serves on advisory boards of these companies
- Effective regulatory tools exist, such as requiring identity verification and threatening to cut off access to U.S. financial systems for non-compliant platforms
Assumptions
- The suspicious betting patterns indicate actual insider trading rather than coincidence or skilled analysis
- Preventing insider trading on military operations serves the public interest
- Regulatory agencies have the technical capability to enforce know-your-customer rules on crypto platforms
- Political will for regulation could exist under a different administration
- The social benefits of prediction markets can be preserved while eliminating insider trading