Congress Opens Insider Trading Probe Into Polymarket and Kalshi
House Oversight Chairman James Comer opened a formal investigation into prediction market operators Polymarket and Kalshi, sending document requests to both CEOs. The probe follows reports of trades that may have used non-public information, including an arrest of a U.S. soldier and a New York Times review of more than 80 suspicious trades.
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Story Updates
- Updated Nov 10, 2026, 03:01 PM: Decrypt reports the probe targets Kalshi and Polymarket over wagers on the Iran war and Venezuela attack, and cites Dan Boyle's comments.
What Congress Announced
Representative James Comer, Republican of Kentucky and chairman of the House Oversight and Government Reform Committee, announced a formal investigation into Polymarket and Kalshi on Friday, May 22. Comer sent letters to Kalshi CEO Tarek Mansour and Polymarket CEO Shayne Coplan requesting a broad set of internal records.
The requests cover know-your-customer standards, policies for detecting suspicious trades, internal analysis of how insider trading scandals affected each company's reputation, and deliberations over offering wagers tied to armed conflicts. Comer also asked for all communications and documents related to markets on the Iran war and the U.S. attack on Venezuela earlier this year. In his statement, Comer said, "This growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary."
The Triggering Activity
The probe follows several reported incidents. Weeks before the letters, a U.S. soldier was arrested for allegedly placing Polymarket bets on the timing of American military actions using classified information. The day before Comer's announcement, Kalshi fined multiple U.S. politicians for betting on the outcomes of their own elections.
Comer's move also followed a New York Times investigation published the prior week that identified more than 80 instances of potential insider trading on Polymarket. Bitcoinist and CoinDesk had earlier framed the matter around a series of trades raising questions about information asymmetry and the misuse of classified government information. Neither outlet's reporting, as summarized here, has confirmed the identities of specific individuals beyond the arrested soldier and the fined politicians.
Platform Responses and Regulatory Pressure
Both companies say they are actively detecting and removing insider traders. Dan Boyle, a partner at Boies Schiller Flexner and a former federal prosecutor focused on gambling-related fraud, told Decrypt that the companies' detection claims could cut both ways: if they can catch some insiders, lawmakers may ask why others go unnoticed. Boyle said the firms are signaling they have and will use detection technology.
The pressure is not limited to this committee. Last month the Senate unanimously passed a resolution barring its own members and staff from trading on prediction markets. Unlike many recent requests from Democratic lawmakers scrutinizing crypto firms, this House investigation is backed by Republican committee leadership.
What Comes Next
Polymarket and Kalshi both run event-contract markets on outcomes such as elections and policy decisions. The Committee's records requests put their surveillance, compliance and KYC practices under direct review, and the CEOs' responses will shape how regulators assess self-policing in the sector. The inquiry does not by itself establish wrongdoing by either platform or any trader, and its outcome depends on what the internal records show and whether the Committee makes referrals to enforcement agencies.
Why It Matters
For Traders
Open positions on politically sensitive prediction markets may face elevated regulatory and liquidity risk while the Committee's records requests are pending.
For Investors
Federal attention from both parties suggests new disclosure or market-access rules could arrive for prediction markets, shaping the sector's growth path.
For Builders
Event-market builders should expect demands for trader-identity verification, surveillance tooling and audit-ready records as baseline compliance.
This article is for information only and is not financial advice. Read the full disclaimer.
