Chair

Security

Polymarket

James

<h2 id="tldr">TLDR</h2>
<ul>
 <li>Congress has launched an investigation into Polymarket and Kalshi over insider trading concerns.</li>
 <li>Lawmakers are examining whether government employees used confidential information to profit on prediction markets.</li>
 <li>The House Oversight Committee has requested internal records from both platforms to assess compliance systems.</li>
 <li>James Comer said Congress may introduce legislation to restrict government officials from using prediction markets.</li>
 <li>Regulators are focusing on identity verification, geographic controls, and detection of suspicious trading activity.</li>
</ul>
U.S. lawmakers have launched an investigation into prediction market platforms, including Polymarket, over insider trading concerns. The House Oversight Committee seeks internal data to assess whether government officials exploited confidential information. The probe places <a href="https://blockonomi.com/house-oversight-committee-launches-insider-trading-investigation-into-kalshi-and-polymarket/" rel="noopener noreferrer nofollow">Polymarket</a> and rival Kalshi at the center of regulatory scrutiny.
The inquiry follows rising concerns that prediction markets could enable unfair trading linked to government actions. Lawmakers say such platforms may allow users with privileged information to profit from sensitive developments.
<h2 id="polymarket-and-kalshi-face-lawmaker-scrutiny">Polymarket and Kalshi Face Lawmaker Scrutiny</h2>
House Oversight Chair James Comer confirmed the probe targets Polymarket and Kalshi executives. He requested internal records to evaluate compliance measures and trading oversight systems.
Comer said officials worry that government employees could use insider knowledge for financial gain. He told <a href="https://www.cnbc.com/2026/05/22/kalshi-polymarket-comer-insider-trading-probe-congress.html" rel="noopener noreferrer nofollow">CNBC</a> that policymakers want to determine how widespread such activity might be.
He added that Congress may pursue legislation restricting participation by government officials. “Members of Congress can’t participate in prediction markets,” Comer said.
Letters sent to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour outlined key concerns. Lawmakers asked about identity verification, geographic controls, and monitoring of suspicious trades.
Regulators have increased attention on prediction markets as their popularity grows. Platforms now cover events across politics, crypto, sports, and economic indicators.
<h2 id="growth-of-prediction-markets-raises-security-concerns">Growth of Prediction Markets Raises Security Concerns</h2>
Trading volumes in <a href="https://blockonomi.com/cftc-sues-minnesota-over-state-ban-on-prediction-markets-law/" rel="noopener noreferrer nofollow">prediction markets</a> have expanded rapidly in recent years. A Bernstein report estimated volumes reached $51 billion and could hit $240 billion by 2026.
The same report projected the sector could approach $1 trillion by 2030. Analysts said markets are shifting toward broader “information trading” platforms.
Lawmakers also raised concerns during a Senate Commerce Committee hearing earlier this week. Senators questioned how these platforms prevent manipulation and protect users.
<a href="https://blockonomi.com/senator-ted-cruz-opposes-privacy-bill-aimed-at-stopping-doxxing-of-americans/" rel="noopener noreferrer nofollow">Senator Ted Cruz</a> criticized the industry over risks tied to sports event contracts. He warned that financial incentives could influence outcomes and integrity.
Senator John Hickenlooper raised concerns about marketing practices targeting younger users. He said aggressive promotion could contribute to gambling-related harm.
Blockchain analytics firm Bubblemaps reported unusual trading activity on Polymarket. The firm identified 80 bets with a 98% win rate, which it described as statistically improbable.
CEO Nicolas Vaiman said such patterns could indicate insider knowledge. He warned that adversaries could also detect suspicious trades and exploit them.
The House Oversight Committee has not announced a timeline for the investigation. Requests for information from Polymarket and Kalshi remain pending responses.
The post <a href="https://blockonomi.com/polymarket-faces-u-s-probe-over-possible-insider-trading-activity/" rel="noopener noreferrer nofollow">Polymarket Faces U.S. Probe Over Possible Insider Trading Activity</a> appeared first on <a href="https://blockonomi.com" rel="noopener noreferrer nofollow">Blockonomi</a>.

Polymarket Faces U.S. Probe Over Possible Insider Trading Activity

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