U.S. Diplomats Warned Against Iran Talks Wagers

(MENAFN) U.S. diplomats have been placed on notice against leveraging classified government information to place wagers connected to ongoing Iran negotiations, the Wall Street Journal has revealed, as authorities intensify scrutiny over a wave of suspiciously timed bets and financial trades tied to the Middle East conflict.

The U.S. State Department circulated an internal memorandum to employees across the globe, cautioning that exploiting non-public official information for personal financial gain constitutes a "very serious offense" that "will not be tolerated," the WSJ reported Thursday. The directive explicitly named online prediction platforms Kalshi and Polymarket — services that allow users to speculate financially on the outcomes of world events.

The memo arrived approximately one week after the arrest of a U.S. special forces soldier charged with using classified intelligence to profit from bets placed on the removal of Venezuelan President Nicolas Maduro. Federal prosecutors allege the suspect — who has since pleaded not guilty — accumulated more than $400,000 in winnings from wagers placed ahead of a U.S. military raid in January.

Polymarket has come under particular fire over Iran-linked activity, with multiple media outlets reporting that a cluster of accounts collectively netted over $1 million through bets that accurately anticipated the U.S.-Israeli bombardment of Iran.

The controversy has since bled into conventional financial markets. A substantial short position on crude oil was executed on Wednesday — just one hour before news of a potential U.S.-Iran peace deal sent prices into a sharp decline. Energy market analysts who spoke to MarketWatch flagged the trade as suspicious, characterizing it as part of a recurring pattern observed since hostilities broke out in late February.

The Justice Department and the Commodity Futures Trading Commission are separately reported to be examining at least four oil trades collectively valued at more than $2.6 billion, each placed shortly before market-moving public statements from U.S. and Iranian officials.

The widening scandal has also cast a spotlight on the Trump family's financial ties to the prediction market industry. The New York Times reported in January that Donald Trump Jr. held advisory relationships with both Polymarket and Kalshi, and maintained a direct investment in Polymarket through his venture firm, 1789 Capital.

President Trump addressed the controversy with measured distance, telling reporters he was "not happy with any of that stuff," while adding that "the whole world, unfortunately, has become somewhat of a casino."

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