- Four bets on oil prices worth $2.6 billion have caught the attention of the DOJ and CFTC.
- The DOJ and the CFTC are investigating the trades for potential insider trading.
- All four trades were suspiciously well-timed with announcements about the US-Iran war.
The US Department of Justice (DOJ) and the Commodities and Futures Trading Commission (CFTC) have launched an investigation into notable oil trades executed shortly before President Donald Trump announced events related to the war in Iran.
Four Suspiciously Timed Oil Trades
Four separate trades with a combined value of $2.6 billionare under investigation. Those trades positioned bets that oil prices would fall just before sharp declines, yielding substantial profits. Data from the London Stock Exchange group show a $500 million wager on lower oil prices on March 23, barely 15 minutes before Trump announced decisions to suspend attacks on Iran’s power grid.
Investigators identified another $960 million bearish bet placed on April 7, shortly before Trump announced a temporary ceasefire in the ongoing war. Meanwhile, another “well-timed” bearish bet worth $430 million was placed on April 21, just 15 minutes before Trump announced the decision to extend the ceasefire.
The fourth suspicious bet identified by investigators involves a $760 million position placed on April 17, 20 minutes before Iranian Foreign Minister Abbas Araghchi posted on social media that the Strait of Hormuz would remain open.
Investigators Suspect Inside Trading
The level of precision in those positions, with all of them happening only minutes before crucial announcements, drew scrutiny from the authorities. Investigators suspect that the bettors accessed advance knowledge of non-public information, an approach that is not permitted in the prediction market.
It is worth noting that the data available to the authorities does not identify the individuals who placed the trades. Still, authorities do not have conclusive evidence that whoever placed those trades had prior knowledge of the outcome.
The ongoing investigation highlights one factor delaying the CLARITY Act. A section of the US Senate, mainly comprised of Democratic legislators, proposes that the bill should prevent senior government officials from profiting off crypto interests. Notably, the CLARITY Act has passed the House 294-134 and moved through the Senate Agriculture Committee before stalling.
In the meantime, the DOJ and the CFTC have requested data from CME Group Inc. and Intercontinental Exchange Inc. Meanwhile, Senator Elizabeth Warren and other lawmakers raised concerns about potential insider trading or market manipulation involving sensitive information.
Related: When is the CLARITY Act Going to Pass? Let’s Ask Claude
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