Comer Opens Congressional Probe Into Insider Trading on Prediction Markets
CNBC reported Friday that House Oversight and Government Reform Committee Chair James Comer, R-Ky., has launched formal investigations into prediction markets insider trading on platforms Kalshi and Polymarket. Comer announced the inquiry live on CNBC’s “Squawk Box” and simultaneously dispatched letters to both companies requesting documents.
Comer Demands Answers From Platform CEOs
The committee chair sent separate letters to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour, asking how each platform verifies user identities, enforces geographic restrictions, and flags unusual trading activity. Comer told CNBC that internal platform records are the only practical tool for identifying bad actors. He argued those records are essential for assessing whether the companies are meeting their legal obligations. Neither Kalshi nor Polymarket had commented publicly at the time of publication.
A Pattern of Suspicious Trades Drove the Inquiry
Comer pointed to a string of troubling incidents that prompted the investigation. Last month, a U.S. soldier was arrested on allegations that he used classified knowledge to place Polymarket bets on the removal of former Venezuelan leader Nicolas Maduro, reportedly pocketing around $400,000. Separately, a New York Times investigation identified more than 80 Polymarket accounts that displayed suspicious trading patterns, including wagers placed just hours before U.S. and Israeli military strikes on Iran. Comer said the concern extends to members of Congress, White House officials, and other government employees who could exploit non-public information for profit on any government-related contract.
Background: Prediction Markets Under Growing Scrutiny
Prediction markets allow users to wager on the outcomes of events ranging from sports results to elections and policy decisions. Both Kalshi and Polymarket have grown rapidly in recent years, drawing increasing attention from state and federal regulators. Kalshi operates from New York and is regulated by the Commodity Futures Trading Commission. Polymarket is a blockchain-based platform licensed in Panama, running limited CFTC-regulated products in the U.S. while keeping international operations outside American regulatory reach. Earlier this year, both companies announced tighter internal rules around insider trading following a wave of high-profile suspicious bets.
Legislation Could Follow the Investigation
Comer said the probe has a dual purpose. Beyond establishing how widespread the problem already is, he wants to build a legislative record. He suggested barring members of Congress, administration officials, and government employees from participating in prediction markets altogether. That proposal could face pushback from platform operators who argue existing CFTC oversight is sufficient. The investigation marks the latest escalation in a broader Washington effort to impose clearer guardrails on a fast-growing market that has moved well beyond its niche origins.
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