The House Oversight Committee is investigating how customers of Kalshi and Polymarket could be using non-public information to engage in insider trading, escalating concerns about prediction markets after some suspiciously well timed trades.
House Oversight Chairman James Comer asked Polymarket’s Shayne Coplan and Kalshi’s Tarek Mansour on Friday for documents to assess how the platforms verify the identities of account holders, enforce geographic restrictions and monitor suspicious trading activity.
Prediction markets, which allow users to bet on just about anything, have exploded in popularity over the past year and a half. But critics argue some of the profitable bets are almost too good to be based on luck alone.
“As a US-regulated exchange we are proud of our comprehensive protections against insider trading,” said Kalshi spokesperson Elisabeth Diana.
A spokesperson for Polymarket said the company maintains a comprehensive market integrity framework. Both firms added they look forward to engaging with lawmakers.
In April, a US soldier was charged with using classified information about the timing of the capture of then-Venezuelan President Nicolás Maduro to make more than $400,000 trading on Polymarket. The company said that it identified a trader using classified information and referred the matter to the Justice Department.
Kalshi also said that month it had suspended and fined three congressional candidates for “political insider trading” on bets tied to their own campaigns. The firm said at the time it was committed to policing all types of unfair or improper trading on its platform.
Comer pointed to those examples on Friday and said “this growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary.”
Concerns about potential insider trading have escalated this year amid a series of suspicious trades ahead of President Donald Trump’s policy announcements. Lawmakers have flagged the unusual trading activity and asked regulators to look into it.
Amid the escalating pressure, the Commodity Futures Trading Commission has begun investigating a series of trades in the oil futures market, Bloomberg News reported in April. The agency is leading that probe into trading on platforms belonging to CME Group Inc. and Intercontinental Exchange Inc., said people familiar with the matter.
