Hegseth Halts Insider Bets on War Markets
Pentagon memo bans staff from trading on secret military intel.
By Tariq Mahmoud ·
Defense Secretary Pete Hegseth has issued a directive that prohibits Pentagon personnel from using secret information to place bets. The order was released in a memo dated October 20. It went to top officials at the Department of Defense and Combatant Command leaders. The document was published by CBS News on October 22.
The memo carries a firm subject line: "Do Not Compromise Military Operations for Personal Financial Gain." Hegseth states that when staff members trade on military outcomes, they create a signal. Foreign intelligence services can use that signal to predict movements and targets. He stresses that soldiers rely on the enemy not knowing what is coming. He writes that troops deserve protection, not exposure for personal gain.
The ban applies to all financial platforms. This includes traditional betting services and prediction markets such as Polymarket and Kalshi. Staff cannot make transactions based on nonpublic information. The rule covers both classified and unclassified data. Hegseth's memo also warns that betting can warp judgment. It argues that personal profit must not influence military decisions.
Past cases show why the Pentagon is acting. In April, a US Army soldier was arrested. He faced charges for using confidential data to bet on military operations. He placed wagers on the timing of the capture of Venezuelan President Nicolás Maduro. Reports say he made $410,000 on Polymarket bets.
Other data points to wider issues. An August report by the Anti-Corruption Data Collective looked at wallet activity. The group found 152 suspicious wallets that placed longshot bets. These bets focused on military and defense markets. The wallets won a combined $8 million.
The new rule bans insider trading on war markets. It seeks to close a risk to US troops. It also limits foreign intelligence access to US plans. The Pentagon has not announced specific penalties for violations. It is unclear how the department will monitor trades across all platforms. The department has not said if past bets will be investigated.
Source: Ars Technica
