Chair

Absolute

Polymarket

James

House Oversight Committee Chair James Comer has opened an investigation into whether prediction-market platforms Kalshi and Polymarket have enough safeguards to stop insider trading by users with access to non-public government information.
Formal letters sent to <a href="https://oversight.house.gov/wp-content/uploads/2026/05/Polymarket-Prediction-Markets-Letter.pdf" rel="noopener noreferrer nofollow">Polymarket CEO Shayne Coplan</a> and <a href="https://oversight.house.gov/wp-content/uploads/2026/05/Kalshi-Prediction-Markets-Letter.pdf" rel="noopener noreferrer nofollow">Kalshi CEO Tarek Mansour</a> request documents covering identity verification, domestic and international KYC rules, geographic access controls, suspicious-trading detection, personal-data handling and compliance with applicable CFTC rules. The committee asked both companies to provide materials by June 5, 2026.
The inquiry focuses on markets tied to elections, <a href="https://cryptoadventure.com/polymarket-war-bets-raise-insider-trading-concerns-after-98-win-rate-claim/" rel="noopener noreferrer nofollow">military operations</a> and geopolitical events, where government employees, contractors or people with security clearances could have access to information before the public. Comer’s letters also request records tied to U.S. or allied military operations in Iran and the U.S. operation to capture Venezuelan President Nicolás Maduro, known as Operation Absolute Resolve.
The Polymarket letter cites an April 24 federal indictment alleging that U.S. Army Master Sergeant Gannon Ken Van Dyke used classified information related to Operation Absolute Resolve to make more than $409,000 in personal gains on Polymarket. The letter also points to suspicious trades placed before unannounced U.S. and Israeli military activity involving Iran.
Kalshi is facing questions from a different regulatory angle. The platform has operated as a CFTC-designated contract market since 2020, but its global expansion has raised questions over whether international users face equivalent verification, access restrictions and <a href="https://cryptoadventure.com/insider-trading-in-prediction-markets-explained/" rel="noopener noreferrer nofollow">insider-trading controls</a>. The Kalshi letter also references past political-candidate trading cases, including users betting on their own races.
<h2 id="market-growth-raises-compliance-pressure">Market Growth Raises Compliance Pressure</h2>
The investigation lands as prediction markets move from crypto-native speculation into a more mainstream political and financial product category. Kalshi operates inside the U.S. regulated event-contract system, while Polymarket has built a larger crypto-linked market structure around global event betting. Both platforms now sit at the center of a policy fight over whether prediction markets are useful forecasting tools, gambling products, financial contracts or all three at once.
That debate has become harder as markets expand into sensitive events. Prices on prediction markets can become public probability signals, but trades placed before military action, election decisions or government announcements can also look like information leakage. The committee is now pressing for account records, suspicious-trade flags, referral procedures and internal assessments around armed-conflict and military-operation contracts.
Polymarket has already faced heavier scrutiny in recent weeks. CryptoAdventure recently covered how <a href="https://cryptoadventure.com/polymarket-brings-private-company-bets-into-prediction-markets-with-nasdaq-private-market-data/" rel="noopener noreferrer nofollow">Polymarket brought private-company bets into prediction markets</a>, widening the platform’s reach beyond elections and crypto. The platform also dealt with a separate operational-security incident this week, where a <a href="https://cryptoadventure.com/polymarket-recovery-effort-freezes-164k-after-internal-wallet-breach" rel="noopener noreferrer nofollow">recovery effort froze $164,000 after an internal wallet breach</a>.
The House probe now shifts the pressure from product growth to market integrity. Identity checks, VPN controls, suspicious-trade detection and law-enforcement referrals are no longer backend compliance details. They are becoming central to whether event markets can keep listing politically sensitive and geopolitical contracts without inviting tighter federal limits.
The June 5 deadline gives both companies a short window to show how they identify users, block restricted access, monitor unusual trades and escalate suspected insider activity. If the responses show weak controls around sensitive events, prediction markets could face a sharper congressional push for restrictions on government insiders, security-clearance holders and contracts tied to military or election outcomes.
The post <a href="https://cryptoadventure.com/house-oversight-probes-kalshi-and-polymarket-over-insider-trading-risk/" rel="noopener noreferrer nofollow">House Oversight Probes Kalshi And Polymarket Over Insider-Trading Risk</a> appeared first on <a href="https://cryptoadventure.com" rel="noopener noreferrer nofollow">Crypto Adventure</a>.

House Oversight Probes Kalshi And Polymarket Over Insider-Trading Risk

Table of Contents

Crypto Adventure

Other articles published on May 22, 2026

Join our free newsletter for daily crypto updates!