The chairman of the Congressional Oversight and Government Reform Committee launched a probe into prediction market platforms Kalshi and Polymarket on Friday.
Key Takeaways
- The Congressional committee sent letters to the CEOs of both Kalshi and Polymarket.
- The chair is concerned about how widespread insider information trading is at those companies.
- He has requested documents on safeguards and identifications.
Rep. James Comer announced he’s looking into how prevalent insider trading has become and what the companies are doing to stop it, sending a letter to both prediction market operators.
“There’s a concern now that members of Congress, the President’s administration, any type of government employee could use basic insider information to make huge profits on anything government-related,” Comer told CNBC. “So we want to not only launch an investigation to see how widespread this has been thus far, but also to prove a case that we’ve got to pass some type of legislation.”
🚨 INSIDER TRADING: Chairman @RepJamesComer warns a high-level insider made a $400K profit tied to a military operation.
— Oversight Committee (@GOPoversight) May 22, 2026
People in government with access to this information should not be allowed to participate in prediction markets.
We are investigating 👇🏻 pic.twitter.com/pGL69CUY7y
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Documentation requested
Comer wrote in the letters addressed to Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan that he’s specifically "examining the adequacy of company safeguards” to stop users from circumventing U.S. federal regulations.
“Internal records held by prediction market platforms are the only means by which bad actors can be identified and to determine whether platforms are meeting their legal obligations,” Comer wrote. “Therefore, the Committee requests documents and information to better understand how (Polymarket and Kalshi) implements identity verification for domestic and international account holders, enforces geographic restrictions, and detects anomalous trading activity to prevent insider trading across its global platform.”
Comer’s request includes KYC verification policies, procedures for detecting, investigating, and reporting suspicious trading, documents on specific U.S. military operation markets, how the companies collect and use data, and the identification of users with U.S. government security clearance.
Kalshi said in a statement to CNBC: “(We) look forward to engaging with the Committee and its members about the systems and processes that we have spent years building,” adding, “As a U.S.-regulated exchange we are proud of our comprehensive protections against insider trading.”
Taking aim
Still, Comer specifically noted a U.S. Army soldier using inside information on the capture of Venezuelan President Nicolas Maduro to make $400,000 on Polymarket as a reason for the Congressional inquiry.
Gannon Van Dyke was charged with unlawful use of confidential information in April after he was accused of purchasing $33,000 worth of “yes” contracts on the prediction market platform’s “Maduro Out by January 31, 2026.”
The Oversight and Government Reform Committee cited a New York Times article that reported suspicious trading activity from 80 users on Polymarket. The committee included U.S. and Israeli military operations in Iran, California gubernatorial candidate Kyle Langford purchasing a political contract for himself to win the race, and three other politicians who were banned by Kalshi as points of concern.
Comer said it wouldn’t be “too much to ask” for members of Congress, Presidential administrators, and other government employees to stay off prediction market sites, which are regulated by the Commodity Futures Trading Commission (CFTC).
“This growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary,” Comer said.
In the news
Comer’s probe is another ramp-up from lawmakers concerned about insider trading at Kalshi, Polymarket, and other platforms.
The Senate recently banned members and their staff from using prediction markets, while White House staffers were warned in April that it's a “criminal offense” to trade using inside information.
Federal prosecutors are already conducting their own investigations into insider trading. Two U.S. lawmakers introduced a bill earlier this year to ban political figures from using prediction markets for profit.
In other prediction market news, the Senate Commerce Committee raised concerns this week about consumer protections surrounding prediction markets' sports contracts. More than a dozen states are involved in lawsuits with trading exchanges, including Kalshi and Polymarket, or the CFTC.
