House Oversight chair launches probe into insider trading on Kalshi and Polymarket

House Oversight and Government Reform Committee Chairman James Comer sent letters on Friday to the chief executives of Kalshi and Polymarket as part of a congressional inquiry into insider trading safeguards at the two largest prediction market platforms.

The letters request documents detailing how each platform verifies user identities, enforces geographic restrictions, and detects anomalous trading activity, CNBC first reported.

Comer announced the investigation on CNBC's "Squawk Box," citing trades tied to elections and U.S. military action in Venezuela and Iran.

He told the network he wants to determine how widespread insider trading has been and build the case for legislation that would bar members of Congress, administration officials, and government employees from trading on prediction markets altogether.

Both Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour have been asked to produce the requested documents and communications by June 5.

The probe lands against a backdrop of documented incidents on both platforms. A U.S. soldier was arrested in April for allegedly using inside information about the ouster of former Venezuelan leader Nicolas Maduro to net roughly $400,000 in Polymarket bets.

Separately, a New York Times investigation found more than 80 Polymarket users placed suspicious trades, including wagers made hours before U.S. and Israeli strikes on Iran.

Tightened controls

Both companies moved to tighten controls ahead of Friday's announcement. Kalshi suspended three congressional candidates in April after they bet on their own races, which violated company rules.

Polymarket hired blockchain analytics firm Chainalysis to detect insider trading and market manipulation in late April, part of its push for CFTC approval.

Comer's move responds directly to pressure from seven Democratic lawmakers led by Rep. Chris Pappas of New Hampshire, who wrote to the Oversight Committee on May 11 calling for subpoenas of both platforms.

Bipartisan legislation targeting prediction market insider trading has been introduced this Congress, with several bills aimed specifically at restricting trades by those with access to non-public government information.

Kalshi operates under CFTC regulation in New York and does not permit anonymous trading. Polymarket is licensed in Panama and runs its primary platform outside U.S. regulatory oversight, with a separate, limited CFTC-regulated product for domestic users.

The Block has contacted Kalshi and Polymarket for comment.