U.S. House of Representatives conducts a thorough investigation into prediction market Polymarket and Kalshi for insider trading, preventing officials from profiting off "state secrets"

Relying on national secrets to predict markets and get rich? The U.S. Congress officially steps in!
Chairman James Comer of the House Oversight Committee announced the launch of an insider trading investigation into Polymarket and Kalshi, demanding the platforms hand over internal data on user verification and trading monitoring.
Previously, not only did the U.S. military use confidential information to make a profit of $400k through early bets, but some also placed precise bets just before military strikes.
Cross-party Congress is brewing new legislation to ban government officials and Congress members from participating in prediction markets altogether.
(Background summary: Polymarket wallet hacked! $5,000 POL drained every 30 seconds, over $600k evaporated)
(Additional background: Polymarket rumored to secretly expand into Japan, planning to lobby the government to lift restrictions on prediction markets by 2030)

Table of Contents

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• Outrageous Cases: U.S. military profits of $400k using secrets, candidates betting on themselves
• Congress’s final ultimatum: Submit internal documents by June 5
• Drafting legislation to ban officials from gambling

As prediction markets like Polymarket and Kalshi grow explosively in popularity, the issue of “insider trading” behind the huge profits has finally attracted strong attention from the U.S. federal government.

On Friday (22), Chairman James Comer of the House Oversight and Government Reform Committee officially announced on CNBC that he has sent letters to Shayne Coplan, CEO of Polymarket, and Tarek Mansour, CEO of Kalshi, requesting both companies to explain and provide internal records related to preventing insider trading.

Outrageous Cases: U.S. military profits of $400k using secrets, candidates betting on themselves

This congressional investigation is not unfounded. Recently, several controversial bets with national security and ethical concerns have occurred on prediction markets:

• U.S. military leveraging secrets for profit: Last month, a U.S. soldier was arrested for allegedly using internal confidential information to precisely bet on Nicolas Maduro, the former leader of Venezuela, stepping down in January, illegally earning about $400k.
• Early leaks of military actions: According to a recent investigation by The New York Times, over 80 Polymarket users exhibited highly suspicious trading patterns, including placing accurate bets “a few hours before” the U.S. and Israel launched military strikes on Iran.
• Politicians as players and referees: On the Kalshi platform regulated by the U.S. CFTC, although contracts related to war or death are prohibited, three congressional candidates were still caught and suspended in April for “betting on their own election outcomes.”

Comer sternly pointed out in the letter: “The rapid growth of this platform, the infrastructure of cryptocurrencies, and the anonymity it grants users may create unforeseen structural conditions that allow bad actors — especially individuals with access to national security secrets — to exploit.”

Congress’s final ultimatum: Submit internal documents by June 5

Although Kalshi is headquartered in New York and regulated by the CFTC, and does not allow anonymous betting; while Polymarket operates on blockchain, overseas, and permits anonymity, both now face the same political pressure.

The committee has formally demanded that both platforms submit relevant documents and communication records by June 5, specifically detailing how they:

2. Implement identity verification (KYC) for domestic and international account holders.
3. Enforce strict geographic restrictions (such as blocking users from restricted regions).
4. Detect abnormal trading activities to prevent insider trading across the global platform.

Drafting legislation to ban officials from gambling

Behind this investigation is a strong bipartisan consensus. Earlier, seven Democratic House members, led by Congressman Chris Pappas, had already called for the committee to issue subpoenas to thoroughly investigate the matter.

Comer explicitly stated in an interview that this investigation is not only to understand the extent of insider trading but also to pave the way for future legislation. He emphasized: “We must pass some form of legislation. I believe that requiring Congress members, government employees, or presidential officials to refrain from participating in prediction markets is not an overreach at all.”