The week of Oct. 10, as Bitcoin crashed and panic spread across group chats, a handful of people were celebrating. A new crypto wallet with no previous activity made $192 million during the chaos of Trump’s tariff announcement. The wallet, address “0xb317” on Hyperliquid, reportedly opened a $163 million short position just before the news broke and cashed in on the sharp downturn.
Is this insider trading, or did someone just make a lucky bet on the market? Whether or not anyone in Washington (or close to it) traded crypto before the crash, this playbook isn’t new.
How Insider Trading Works
Insider trading happens when someone with access to confidential company information buys or sells stocks before that information becomes public. Because those trades happen before the rest of the market can react, insiders can profit while everyone else is left catching up.
But it’s not just corporations. In Washington, insiders like lawmakers, senior staff, and policy executives can access nonpublic, market-moving information through private briefings, legislative drafts, or tariff strategy sessions. These moments create opportunities to position themselves before policy decisions become public quietly.
Data from Unusual Whales shows spikes in trading activity by members of Congress around major policy announcements or national crises, such as the COVID-19 pandemic. To combat this, the STOCK Act of 2012 was introduced to promote transparency. It requires policymakers to disclose any trade worth $1,000 or more within 45 days, with those disclosures made publicly accessible.
The problem is that transparency without accountability doesn’t work. Failing to report trades on time carries a fine of just $200, and there’s no real oversight to investigate conflicts of interest. The frustration isn’t that powerful people are making money; it’s that they’re often making policy decisions that move markets, then profiting from those same decisions before the public even knows. It’s like cutting in line in a race. And it raises an even bigger concern: when personal portfolios are on the line, are lawmakers still making choices in the public’s best interest?
A Pattern That Keeps Repeating
This issue didn’t start, nor will it end, in 2025. Over time, clear patterns have emerged, like when Rep. Val Hoyle (D-OR) failed to disclose 217 stock trades, estimated between $245,000 and $3.3 million. Other examples include when Rep. Rich McCormick (R-GA) reported two dozen trades nearly two years late, Sen. Rick Scott (R-FL) disclosed $26 million in trades more than a year after they occurred, and Rep. Nancy Pelosi (D-CA) has long faced scrutiny for well-timed tech trades, including a 2025 purchase of Broadcom (AVGO). During the 2020 pandemic, several U.S. senators dumped large stock positions after closed-door COVID briefings — but before the market crash — sparking public outrage and DOJ and SEC investigations.
Why It Hurts Young Investors
Many Gen-Z investors who entered the market during the pandemic or the crypto boom are trading with optimism, risk, and limited resources. When markets swing violently, especially after policy shocks, they’re the ones who lose the most. Meanwhile, insiders with capital, leverage, and early access can “catch the drops” and profit off volatility that others can’t see coming. It all raises one big question: if the game is rigged, why should anyone want to play?
What Could Change
A new proposal, the End Congressional Stock Trading Act (H.R. 1908), was introduced this year to ban lawmakers from trading altogether. Supporters argue it could eliminate conflicts of interest and strengthen public trust. Others have called for shorter reporting windows and independent oversight to catch suspicious trades in real time.
For now, though, the reality remains the same: the people writing the rules are still able to quietly profit from breaking them. And for young Americans trying to build wealth in good faith, that realization is nothing short of demoralizing.