House Oversight Committee Chairman James Comer, R-Ky., says he is launching an investigation into possible insider trading involving the prediction platforms Kalshi and Polymarket.
The platforms allow users to place financial bets on the outcomes of real-world events, including elections, government actions, economic data and sporting events.
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Comer seeks information from both companies
Comer announced the investigation Friday on CNBC’s “Squawk Box,” saying he wants information from both companies detailing what safeguards are in place to prevent insider trading.
CNBC reported that Comer sent letters to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour seeking documents and information related to account verification, trading activity monitoring and fraud detection measures.
In his letter to Coplan, Comer reportedly argued that internal records may be the only way to identify potential “bad actors” on the platform.
Comer said his concern is that members of Congress, administration officials or government employees with access to nonpublic information could use that knowledge to profit from market activity tied to government events.
Previous case fueled concerns
The investigation follows a Justice Department case announced last month involving an American soldier accused of using confidential information tied to a planned operation involving Venezuelan President Nicolas Maduro.
In the indictment, prosecutors allege Gannon Ken Van Dyke used advance knowledge of the operation to place bets on Polymarket and made roughly $400,000.
Van Dyke has pleaded not guilty to charges that include unlawful use of confidential government information, commodities fraud and wire fraud.
Comer said he wants to determine how widespread potential insider trading may be and whether legislation is needed.
“I think it wouldn’t be too much to ask to say members of Congress can’t participate in the predictions market, nor can government employees or people in the president’s administration,” he said.
The issue has already attracted bipartisan attention. Seven Democratic lawmakers have previously urged Comer to subpoena prediction market operators over what they described as “apparent corruption and insider trading” concerns.
Recent reporting from The New York Times also found that more than 80 users made suspicious trades shortly before U.S. and Israeli strikes against Iran.
Kalshi, which is headquartered in New York and regulated by the Commodity Futures Trading Commission, does not allow event contracts tied to war or death. The company has also previously suspended three congressional candidates who traded on their own races.
Polymarket is licensed in Panama and also maintains U.S. offices.
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