House Oversight Committee Chairman James Comer has widened his inquiry into possible insider trading on prediction and crypto-linked trading platforms, sending record requests to Crypto.com, Hyperliquid and PredictIt over their user-identification systems, suspicious-trading controls and referrals to authorities.
The Republican congressman’s letters, sent Tuesday, seek to establish whether the platforms can connect trading activity to real-world account holders and detect bets that may have been placed with material nonpublic information. Comer’s office said the investigation could inform legislation prohibiting government officials from trading on prediction markets tied to official actions.
Each company has been asked to provide records covering the past two and a half years, including a list of suspicious-trading referrals made to regulators or law-enforcement agencies. The requests also cover internal monitoring procedures, escalation policies and technology used to flag transactions potentially linked to confidential information.
The effort extends a House Oversight Committee probe launched in May, when Comer sent similar requests to Kalshi and Polymarket. The committee said it has received nearly 1,000 documents from those companies and held several briefings with their representatives.
Hyperliquid questioned over tariff-linked short position
Comer’s request to Hyperliquid focuses on reports of an unusually large leveraged short position opened shortly before a major U.S. tariff announcement in October 2025. The trade reportedly involved a $1.1 billion position placed about 30 hours before the announcement, with public blockchain data showing that the account later made more than $150 million in profit.
A short position generates gains when the price of an asset falls. Leverage allows a trader to control a much larger position with relatively limited collateral, magnifying both potential returns and losses. The scale and timing of the Hyperliquid trade attracted scrutiny because tariff announcements can sharply move global financial markets and crypto prices.
Comer asked Hyperliquid how it identifies account holders, what information it collects when users access the platform and what procedures govern reports of suspicious activity to U.S. authorities. Those questions go beyond whether a trade appears unusual on-chain. They address whether a platform can associate a wallet address with a person, jurisdiction or organization when authorities investigate potential misuse of confidential government information.
Hyperliquid’s structure has made that issue especially relevant. Its trading activity is visible through blockchain records, allowing market observers to identify large positions and track their performance. Public transaction data alone generally does not reveal the owner of a wallet, leaving identity verification, access records and platform compliance systems central to any effort to investigate potentially informed trading.
Crypto.com asked about listings and regulatory decisions
The letter to Crypto.com takes a broader view of potential conflicts involving corporate personnel and government officials. Comer asked whether employees of the company or its affiliates traded contracts tied to internal decisions that had not yet been publicly announced.
The request specifically identifies token-listing and custody decisions. Listings can affect a token’s liquidity and visibility, while a major custody arrangement can signal institutional support or expanded access to a digital asset. Employees aware of such plans before publication could potentially trade related contracts or tokens ahead of a market-moving announcement.
Comer also asked for records concerning government officials who may have traded contracts connected to cryptocurrency regulation or Crypto.com’s regulatory status. The request reflects concern that officials involved in writing, enforcing or influencing crypto policy could use advance knowledge of government actions to trade on event-based markets.
The inquiry does not accuse Crypto.com, Hyperliquid or PredictIt of wrongdoing. Instead, it seeks documentation on the safeguards each platform uses and whether suspicious activity has already been referred to enforcement bodies.
PredictIt faces questions on government-related markets
PredictIt, the prediction-market platform owned by Aristotle Exchange, received questions focused on contracts tied directly to elections, nominations and government action. Comer requested information about trades involving current or former government officials, along with the company’s procedures for verifying customer identities and reviewing suspicious activity.
Prediction markets allow participants to buy and sell contracts whose value is linked to the outcome of a future event. Contracts related to elections, cabinet nominations, legislation, regulation or executive decisions can create particular concerns when participants have access to information unavailable to the public.
The committee is examining whether existing platform controls can distinguish ordinary political forecasting from trading based on privileged access. An official, staff member, contractor or person briefed on a pending decision could have an informational advantage over public participants if that information is used before an announcement.
Comer’s request for referral records may show how frequently platforms have considered such conduct serious enough to report. The letters also seek details on the internal chain of review: how a trade is flagged, who evaluates it and when a platform decides to contact regulators or law enforcement.
Identity checks are at the center of the inquiry
The investigation places know-your-customer procedures at the center of a debate often associated with decentralized or pseudonymous trading. Blockchain systems can make transactions transparent, but wallet addresses do not automatically disclose a trader’s name, location or employment.
Platforms that collect identity documents, payment information, device data or location signals may have more ability to investigate suspicious patterns and respond to legal requests. Services with limited customer verification can face greater difficulty linking a conspicuous trade to an individual, even where the transaction itself is publicly visible.
That distinction is likely to shape the committee’s legislative discussion. A restriction on trading by government officials would depend heavily on whether covered platforms can identify officials, former officials and connected persons before or after they place trades. It would also raise questions over how broadly any rule applies across regulated prediction markets, crypto-native platforms and decentralized trading venues.
Comer’s latest letters suggest the committee is moving from a general concern about politically sensitive event contracts toward a more practical examination of platform surveillance. The records requested from Crypto.com, Hyperliquid and PredictIt could show whether existing systems are designed merely to observe unusual trading or to identify, investigate and report the people behind it.
Worried about KYC and identity checks on trading platforms? Learn more in this detailed guide today.
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