The U.S. House Oversight and Government Reform Committee has launched a formal inquiry into potential insider trading on prediction market platforms Kalshi and Polymarket, demanding extensive internal records by June 5 and warning subpoenas may follow if the companies do not comply.
Focus on nonpublic information and market safeguards
Committee chairman James Comer sent letters on Friday to Kalshi chief executive Tarek Mansour and Polymarket chief executive Shayne Coplan, seeking documents on:
- user identity verification procedures
- geographic restrictions and access controls
- systems for monitoring and flagging irregular or suspicious trading
The inquiry centers on whether people with access to nonpublic government information, especially related to U.S. elections and military operations, may have profited from that knowledge through trades on the platforms.
Comer is weighing legislation that would bar members of Congress and federal employees from participating in such markets.
Allegations tied to military and political events
The probe follows several high-profile allegations, including:
- the arrest of a U.S. soldier accused of using advance knowledge of the ouster of former Venezuelan leader Nicolás Maduro to realize roughly $400,000 in gains on prediction markets
- a separate investigation indicating that more than 80 Polymarket users executed questionable trades, some reportedly just hours before U.S. and Israeli military operations against Iran
The committee highlighted these cases as examples of potential abuse of confidential information in political and geopolitical contracts.
Committee demands and potential subpoenas
In his correspondence, Comer requested that Kalshi and Polymarket deliver detailed records by June 5, including:
- internal compliance policies
- logs or reports on unusual trading patterns
- measures to prevent access by prohibited users, including certain U.S. persons on offshore platforms
Comer has publicly signaled that subpoenas are on the table if the companies do not fully respond, indicating a low tolerance for resistance or delay.
Different regulatory footprints under scrutiny
The investigation draws attention to sharp differences in the platforms’ regulatory positions:
- Kalshi operates out of New York under U.S. Commodity Futures Trading Commission oversight, requires user identification, and does not allow anonymous trading.
- Polymarket is incorporated in Panama and primarily operates an international platform outside direct U.S. supervision, while maintaining a separate, restricted service that complies with U.S. standards.
The committee noted that some of the most suspicious trades occurred on Polymarket’s international platform, which is not supposed to be accessible to U.S. persons.
Recent compliance moves by Kalshi and Polymarket
Both platforms have recently tightened controls amid growing scrutiny:
- Kalshi last month removed three congressional candidates who had placed trades on their own election outcomes, citing violations of internal rules.
- Around the same time, Polymarket hired blockchain analytics firm Chainalysis to help identify manipulation and suspicious flows as it seeks broader regulatory approval in the U.S.
These actions are likely to feature prominently in the committee’s assessment of whether existing safeguards are adequate.
Bipartisan pressure and legislative backdrop
Comer’s move follows a May 11 letter from seven Democratic lawmakers, led by Representative Chris Pappas of New Hampshire, urging the committee to subpoena Kalshi and Polymarket. The new inquiry represents an escalation from general concern to a formal evidence-gathering phase.
Several bipartisan proposals in Congress aim to limit or ban participation in prediction markets by individuals with privileged government information. Among them is the Public Integrity in Financial Prediction Markets Act of 2026, which would restrict access for certain public officials.
In parallel, the Senate has passed a resolution barring senators and staff from trading on such platforms, signaling broad political appetite to clamp down on perceived conflicts of interest.
Booming market faces regulatory test
The investigation comes against a backdrop of rapid industry growth. Total trading volume on prediction markets reportedly surpassed $63 billion in 2025, with a record $25.7 billion in March 2026 before cooling to $8.6 billion in April. Crypto-related contracts alone generated about $7.3 billion in volume in the first quarter of this year.
That expansion has drawn attention from regulators and lawmakers who see heightened risk that political, military, and other sensitive event contracts could be used by those with inside information.
Implications for platform rules and traders
For traders active on Kalshi, Polymarket, and similar venues, the committee’s move signals a period of elevated regulatory uncertainty:
- categories tied to political and military events may face tighter limits or outright restrictions
- access rules and geographic filters, particularly on offshore platforms, could become stricter
- compliance, surveillance, and reporting obligations are likely to increase
Any disclosures around the June 5 document deadline could quickly influence platform policies, contract availability, and overall market sentiment.
Watching the next steps
Market participants and policy analysts will be watching:
- how fully Kalshi and Polymarket cooperate with Comer’s document requests
- whether the committee proceeds to subpoenas or public hearings
- how both platforms expand or overhaul their monitoring tools and user controls under pressure
The outcome of this probe, combined with advancing bipartisan legislation, is poised to shape the long-term regulatory framework for prediction markets in the U.S., especially for contracts linked to politics, security, and foreign policy.
Curious how regulation could reshape crypto markets? Explore the broader impact in our guide on U.S. crypto regulation today.
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