The U.S. government is waging an illegal, congressionally unauthorized war on Iran. Thirteen American soldiers are confirmed dead at the time of writing. More than 200 have been wounded. Over $72 billion of your money has been spent in ten weeks. A war powers resolution to end the conflict failed in both chambers—53-47 in the Senate, 219-212 in the House—on what was practically a party-line vote. Congress has neither declared war, as the Constitution requires, nor formally authorized it. It has simply sat on its hands.
Smedley Butler told us 91 years ago that war is a racket. He could not have imagined a racket this efficient.
At 6:49 a.m. on Monday, March 23, the oil futures market was quiet. Pre-dawn Mondays are always quiet. There was no scheduled data release, no Federal Reserve speech, no obvious catalyst for any significant market activity.
Then, in the span of 27 seconds, roughly 6,200 Brent and West Texas Intermediate futures contracts were sold—a notional value of approximately $580 million, according to the Financial Times‘ analysis of Bloomberg data. The average volume for that same time window over the previous five trading days had been roughly 700 contracts. This was not a trend. It was a detonation.
Simultaneously, approximately 6,000 S&P 500 e-Mini futures contracts were purchased, representing more than $2 billion in notional value. Sell oil. Buy stocks. A perfectly paired bet that would only make sense if you knew—if you were certain—that the geopolitical picture was about to improve dramatically.
At 7:05 a.m., sixteen minutes later, President Donald Trump posted on Truth Social that the United States and Iran had been engaged in “productive conversations” to end the war. He was halting his planned strikes on Iranian power plants. Oil dropped nearly 6%. The Dow surged more than 1,000 points. S&P 500 futures soared more than 2.5%. Whoever placed those trades at 6:49 walked away with a staggering profit.
An unnamed trader at a major hedge fund told the Financial Times the activity was “really abnormal”:
“It’s Monday morning, there’s no important data today, there aren’t any Fed speakers you’d want to front-run. It’s an unusually large trade for a day with no event risk. Somebody just got a lot richer.”
Iran’s government, for what it is worth, denied that any negotiations were taking place. Iran’s Parliament speaker called Trump’s claim “fake news” used to “manipulate the financial and oil markets.” In the grim comedy of this war, the Iranian regime proved more credible than the president of the United States.
Readers of this publication will not be surprised that the state’s monopoly on violence is being leveraged for private enrichment. That is what states do. But the scale and brazenness of what has emerged under this administration is worth examining in detail because it reveals how the concentration of war powers in a single executive, unchecked by Congress or the Constitution, creates opportunities for corruption that no regulatory scheme can contain.
March 23 was not the first suspicious event. As Axios documented, an “epidemic of suspicious trading” has followed this president into every military adventure.
On the Friday before the February 28 strikes which began the Iran War, more than 150 Polymarket accounts placed hundreds of bets predicting American military action. On Polymarket alone, $529 million was traded on contracts tied to the timing of the attack, according to Bloomberg. An anonymous user trading as “Magamyman” netted $553,000 on a bet related to the killing of Iran’s supreme leader, placing the wager moments before an Israeli airstrike ended his life. Six newly created accounts collectively made $1.2 million in profits from bets funded only hours before the strikes.
In February, Israeli authorities arrested two people for placing Polymarket bets based on classified military information they obtained through their service as reservists. This confirmed, in at least one allied country, what everyone already suspected: people with access to war plans are gambling on them.
But the prediction markets, as economist Paul Krugman emphasized in an interview about his widely read column on the March 23 trades, are a sideshow. “There are enormously bigger opportunities for malfeasance in conventional markets and futures markets,” Krugman wrote. The Polymarket bets were “penny ante malfeasance” compared with $580 million in oil and $2 billion in stock futures moved in a single minute on March 23.
Consider the logic of the cycle that has now repeated itself multiple times during this war. On Saturday, March 22, Trump posted on Truth Social demanding Iran “FULLY OPEN” the Strait of Hormuz within forty-eight hours or the United States would “obliterate” Iranian power plants. Markets were closed. Oil traders braced for a catastrophe. The threat was an escalation that, if carried out, would constitute a massive war crime—the deliberate targeting of civilian electricity infrastructure.
Then, forty-eight hours later, the president reversed himself. No bombing. “Productive conversations.” Markets soared.
Treasury Secretary Scott Bessent, who has inexplicably become the administration’s military spokesman, rationalized the whiplash as “sometimes you have to escalate to de-escalate.” But notice the financial geometry of it: the threat craters markets. The reversal spikes them. In between—in the gap between the private decision and the public announcement—anyone with advance knowledge can capture the entire swing.
As Krugman asked in his column: “Are decisions about war and peace in part serving the cause of market manipulation rather than the national interest? If you dismiss this as unthinkable, you just haven’t been paying attention.”
This is a question libertarians should sit with. We have argued for decades that concentrating power in the state inevitably creates incentives for abuse. We have argued that undeclared wars, waged unilaterally by the executive, remove the constitutional checks that exist precisely to prevent this kind of corruption. What we are witnessing is the theoretical case made manifest. When a single man can start and stop a war by social media post, and when nobody around him faces any accountability for profiting from advance knowledge of those posts, the merger of state violence and financial self-dealing becomes inevitable.
This is not a failure of the system. This is the system.
The March 23 trades did not emerge from nowhere. They sit within a broader architecture of corruption that has turned this presidency, and especially this war, into a wealth-extraction machine.
Start with Jared Kushner. Trump’s son-in-law holds no official title but serves as a de facto envoy leading negotiations on Iran. He is simultaneously raising billions for his private equity firm, Affinity Partners, from the governments of the very countries entangled in this conflict. Saudi Arabia’s Public Investment Fund, controlled by Crown Prince Mohammed bin Salman (MBS), was Affinity’s founding investor at $2 billion—a commitment MBS made over the objections of his own investment advisers. According to a congressional investigation, Kushner has collected more than $110 million in Saudi management fees “for investment management services that have reaped little to no return.”
Let that figure settle. Saudi Arabia, the kingdom that has reportedly pressed for attacks on Iran’s energy infrastructure and urged Trump to put troops on the ground, is paying the man negotiating the end of the war $110 million in fees for investments that have produced no meaningful returns. This is not investment management. This is a retainer.
Now Kushner is seeking to raise an additional $5 billion from sovereign wealth funds in Saudi Arabia, the UAE, and Qatar—the same governments whose strategic interests are served by the war his father-in-law is waging. Affinity has already met with PIF to discuss additional investment. Senator Elizabeth Warren (D-MA) summarized the absurdity: “In the middle of a war with Iran, our ‘Peace Envoy’ is in the Middle East trying to raise $5 billion for his private equity firm.” CNN reported that Iran no longer wants to negotiate with Kushner or fellow envoy Steve Witkoff. Neither man brought nuclear experts to the negotiating table in Geneva. Why would they? The purpose of the mission was never serious diplomacy. It was access.
The Saudi PIF has also financed a $7 billion development deal with the Trump Organization—a Trump-branded hotel, golf course, and luxury housing complex. MBS personally showed Donald Trump the plans during a visit in 2025. The same MBS who wants the United States to destroy Iran’s energy sector. The same MBS who had journalist Jamal Khashoggi murdered and dismembered. It was Trump himself who said at the time, “I saved his ass.”
Meanwhile, the Trump family’s crypto ventures have generated at least $4 billion in proceeds and paper wealth since the election, according to The Wall Street Journal. The $TRUMP meme coin has earned the family and its partners an estimated $320 million in trading fees. A $2 billion infusion from the government of Abu Dhabi flowed into the family crypto firm, World Liberty Financial—co-founded by Zach Witkoff, the son of Trump’s Middle East envoy. Donald Trump Jr. is an investor and adviser to Polymarket and a paid adviser to Kalshi—the very platforms where suspected insider trading on his father’s military operations has been documented. Trump’s sons have invested in drone companies competing for Pentagon contracts in the wars their father is waging.
When asked by The New York Times why he didn’t divest this time around, Trump said simply, “I found out nobody cared.”
Here is where this analysis parts company with the mainstream coverage. The usual script goes like this: suspicious trades are discovered. Democrats issue press releases. Calls for investigation follow. Legislation is introduced. Everyone agrees to wait for the next election.
More than forty Democratic lawmakers have now written to the CFTC and the Office of Government Ethics demanding guidance on insider trading. Senator Chris Murphy (D-CT) and Representative Greg Casar (D-TX) have introduced the BETS OFF Act. Representative Ritchie Torres (D-NY) has introduced the Public Integrity in Financial Prediction Markets Act. These bills propose to ban government officials from betting on prediction markets and to close loopholes around war-related contracts.
Let us be honest about what this is. It is a proposal to put a padlock on the barn after the horses have been converted into futures contracts. The Democrats are not proposing to end the war. They are proposing to regulate the side bets. The war powers resolution to end this conflict failed on a nearly party-line vote—which means every Republican and a handful of Democrats voted to let an undeclared, unconstitutional war continue. The same Congress that cannot summon the votes to stop the bombing of Iran is going to stop the profiteering? On what planet?
The CFTC, the agency nominally responsible for policing futures markets, did not respond to Rolling Stone‘s questions about whether it intends to investigate the March 23 trades. Under President Joe Biden, the agency had fined Polymarket $1.4 million and tried to block Kalshi from taking bets on political events. Under Trump, it dropped both efforts. At the SEC, enforcement has hit record lows. The FBI is run by Kash Patel. Until April, the Justice Department was led by Pam Bondi, who personally sold between $1 million and $5 million of Trump Media stock on the same day as the “Liberation Day” tariff announcement. ProPublica found that more than a dozen high-ranking officials made well-timed stock trades around major policy announcements.
Federal prosecutors from the Southern District of New York have reportedly met with Polymarket. Polymarket subsequently adopted its first insider trading rules for its global site—confirming that, until several weeks ago, there was literally nothing on the books prohibiting bets placed on the basis of classified military intelligence.
None of this should surprise anyone who has been paying attention to what happens when the executive branch acquires unilateral war-making power and the institutions designed to constrain it choose not to act. Article I, Section 8 of the Constitution vests the war power in Congress for a reason. The Founders understood, from hard experience with the British Crown, that executives who can start wars at will, without legislative authorization, will inevitably use that power for private gain. As Charles Goyette wrote in these pages: “
The Constitution, often cited but seldom adhered to, lodged warmaking authority with the people’s representatives. The Founders knew from historical precedent that heads of states and executive branches have a propensity to make needless war.”
The insider trading is not the disease. It is a symptom. The disease is the illegal war itself—an aggressive, undeclared conflict launched without congressional authorization against a country that had not attacked the United States, ordered by a president via Truth Social while negotiations were still underway. Thirteen Americans are dead. Tens of billions have been spent. The state is socializing the costs — through reinsurance schemes, through inflation, through higher fuel prices—while a connected few privatize the profits.
The insider trading is possible because the president can start and stop a war by tweet. The financial manipulation is possible because the executive branch has absorbed the war power that the Constitution assigned to Congress. The profiteering is possible because the state has accumulated the power to threaten the obliteration of another country’s civilian infrastructure—or to call it off—with no deliberation, no vote, no oversight, and no accountability.
You do not solve this by banning prediction market bets on wars. You solve this by ending the wars. You solve it by stripping the executive of the unilateral war power it was never supposed to have. You solve it by insisting—as the Defend the Guard movement has argued—that no American soldier be deployed into combat without a congressional declaration of war.
The alternative is what we have now: a state that wages illegal wars for murky purposes, reverses course at random intervals, and enables a select few to profit from every oscillation while ordinary Americans pay at the pump, at the grocery store, and in the flag-draped coffins arriving at Dover.
Smedley Butler was right. War is a racket. It always was. But at least in Butler’s day, the profiteers had the decency to bill the government after the fact. Today they front-run the president’s Truth Social posts.
