Senators Set June 15 Deadline for CFTC Oil Probe Briefing

The CFTC‘s enforcement division has been examining oil-futures trading around Iran announcements since March 23. Chairman Michael Selig said so Friday. That same week, five Democratic senators sent the commission a letter calling for a full investigation, a public update and report to Congress — and a bipartisan staff briefing on the findings by June 15.

Senators Raphael Warnock of Georgia, Amy Klobuchar of Minnesota, Cory Booker of New Jersey, Ben Ray Luján of New Mexico and Elissa Slotkin of Michigan signed the letter, addressed to CFTC Chairman Michael Selig. “The integrity of America’s commodity futures markets must remain above reproach,” they wrote, and they put the trades in the frame of the Commodity Exchange Act: the letter says the activity may violate Section 6(c)(1) and CFTC Rule 180.1, which bar trading on material nonpublic information.

Roughly 15 minutes before President Donald Trump posted on Truth Social that he would postpone strikes on Iranian power plants and energy infrastructure for five days, a single trader made more than $580 million in oil-futures trades. That was March 23, the letter says. Bloomberg reported that futures tied to at least 6 million barrels of Brent and West Texas Intermediate changed hands in two minutes that morning, more than 8.5 times the volume of the same window the prior week. Weeks later, investors placed roughly $950 million betting that oil prices would fall hours before the United States and Iran announced a ceasefire. Futures dropped as much as 15 percent, the letter says, “netting a significant profit.” On May 6, more than $700 million of front-month Brent and WTI contracts traded between 3:42 and 3:47 a.m. Eastern, one hour before an Axios report that the White House and Iran were nearing an agreement to end the conflict. The letter adds its own caution: the evidence “does not rule out the possibility that this trade may have been made legitimately.”

The letter says the Department of Government Efficiency’s reduction-in-force last year fired probationary employees including attorneys in the agency’s enforcement and market-oversight divisions, and it cites turnover in the key Chicago office. The CFTC’s expansion into digital assets and prediction markets, the letter says, may be drawing resources away from traditional commodity derivatives. It asks how many full-time employees are dedicated to monitoring manipulation in fiscal 2024, 2025 and 2026, how many active investigations are running, how the commission tracks manipulation during extreme volatility, and whether it is coordinating with designated contract markets.

Selig’s Friday statement came in a Bloomberg Television interview with Tyler Kendall at the 4th Agricultural Commodity Futures Conference in Overland Park, Kansas. “Our enforcement division has been looking at all these trades,” he said. “We take this stuff very seriously.” He also said prediction markets are under scrutiny ahead of November’s midterm elections, and he criticized Congress for failing to pass the Clarity Act on crypto regulation.

Bloomberg reported that the commission opened an investigation in April, and that Selig publicly promised it would pursue anyone who traded illegally. “We will find you,” he said. The commission also sought large-trader data from CME Group and ICE under its Tag 50 reporting rules to identify who was behind the accounts. Then in October, Bloomberg reported that a senior adviser to Selig ordered staff to retract an internal analysis of the trades that had been referred to the enforcement division. Retracting a referral is not the same as closing an investigation, but it removed the analytical basis the staff had built.

CFTC Enforcement Director David Miller confirmed the probe remains open at a financial industry conference in New York on Thursday. The agency investigated the activity “from the beginning,” Miller said, and it is also examining trading in prediction markets, where bets on government decisions raise the same advance-knowledge question.

Blockchain data firm Bubblemaps identified nine linked Polymarket accounts that earned $2.4 million with a 98% win rate on contracts tied to U.S. military operations, including the February 28 strike on Iran, the killing of Iran’s supreme leader, and the ceasefire agreement. “We cannot say with certainty that this was an attempt to hide, but it is suspicious that funds were routed through CEXs and third-party services before funding new Polymarket accounts, effectively covering their tracks,” Nicolas Vaiman, Bubblemaps’ CEO, told Cointelegraph. Lawmakers have responded with bills: Senator Adam Schiff introduced the DEATH BETS Act in March to ban war-linked contracts on federally regulated prediction markets.