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The House Oversight and Government Reform Committee, led by Chair&nbsp;Rep. James Comer,&nbsp;has <a href="https://oversight.house.gov/release/comer-launches-investigation-into-insider-trading-on-prediction-market-platforms/" rel="noopener noreferrer nofollow">launched an investigation</a> into prediction market platforms Kalshi and <a href="https://www.thestreet.com/crypto/markets/u-s-senate-bans-members-from-trading-on-popular-prediction-markets" rel="noopener noreferrer nofollow">Polymarket,</a> seeking records on how each company prevents insider trading on their platforms.
In letters sent May 22 to Kalshi CEO<a href="https://oversight.house.gov/wp-content/uploads/2026/05/Kalshi-Prediction-Markets-Letter.pdf" rel="noopener noreferrer nofollow"> Tarek Mansour</a> and Polymarket CEO <a href="https://oversight.house.gov/wp-content/uploads/2026/05/Polymarket-Prediction-Markets-Letter.pdf" rel="noopener noreferrer nofollow">Shayne Coplan,</a> Comer requested documents on how each platform verifies user identities, enforces geographic restrictions, and detects anomalous trading activity.
Both CEOs have until June 5 to respond.
<a href="https://www.thestreet.com/crypto/markets/polygon-labs-ceo-says-betting-markets-offer-accurate-predictions" rel="noopener noreferrer nofollow">Related: Polygon Labs CEO says betting markets offer accurate predictions than traditional news</a>
<h2 id="what-triggered-the-probe">What triggered the probe</h2>
Comer cited a string of high-profile incidents that raised red flags around the platforms.&nbsp;
Last month, a United States soldier was arrested for allegedly using inside information to <a href="https://www.thestreet.com/crypto/markets/white-house-warns-staff-against-us-iran-war-bets" rel="noopener noreferrer nofollow">place bets on Polymarket</a> about the removal of former Venezuelan leader <a href="https://www.thestreet.com/crypto/markets/u-s-soldier-arrested-as-venezuela-ghost-returns-amid-iran-ceasefire" rel="noopener noreferrer nofollow">Nicolás Maduro</a>, netting roughly $400,000.&nbsp;
A New York Times investigation also found that more than 80 Polymarket users made trades with suspicious characteristics, including bets placed hours before United States and Israeli strikes in Iran.
In April, Kalshi suspended three congressional candidates who had wagered on their own races, a practice Comer also flagged in his letter to the company.
<blockquote>
 "Internal records held by prediction market platforms are the only means by which bad actors can be identified," he wrote.&nbsp;
</blockquote>
<h3 id="more-news">More News:</h3>
<ul>
 <li><a href="https://www.thestreet.com/crypto/markets/white-house-warns-staff-against-us-iran-war-bets" rel="noopener noreferrer nofollow">White House warns staff against Iran war bets</a></li>
 <li><a href="https://www.thestreet.com/crypto/markets/trader-manipulates-city-weather-sensor-to-win-34k" rel="noopener noreferrer nofollow">Trader manipulates city weather sensor to win $34K</a></li>
 <li><a href="https://www.thestreet.com/crypto/markets/polymarket-traders-nail-israel-yemen-attack-date" rel="noopener noreferrer nofollow">Israel striking Yemen was predicted 24 hours earlier: Polymarket</a></li>
</ul>
<h2 id="what-the-committee-asks">What the committee asks</h2>
Comer&nbsp;expressed particular concern that government employees, members of Congress, and White House administration officials could exploit insider knowledge for financial gain on the platforms.
Comer said the investigation is intended not only to assess how widespread such activity has been, but also to build the case for new legislation that would bar government employees and lawmakers from participating in prediction markets altogether.
Kalshi, a<a href="https://www.thestreet.com/crypto/tag/cftc" rel="noopener noreferrer nofollow"> CFTC</a>-regulated exchange headquartered in New York, said it welcomed the inquiry and was proud of its existing protections.&nbsp;
Polymarket, which operates through a Panama-licensed entity and allows anonymous trading with crypto payments, said it maintains a comprehensive market integrity framework and looks forward to engaging with the committee.
<a href="https://www.thestreet.com/crypto/markets/prediction-market-flash-massive-warning-for-u-s-recession" rel="noopener noreferrer nofollow">Related: Polymarket flashes massive warning for U.S recession</a>

House Republicans launch insider trading probe

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