Rep. James Comer expands House investigation into prediction market insider trading

• The committee has already received nearly 1,000 documents and five briefings from Kalshi and Polymarket since launching investigations in May 2025
• Recent insider trading incidents include a trader earning $400,000 betting on Venezuelan leader's ouster using inside information, and former Rep. George Santos betting on his own State of the Union attendance, resulting in a $71,356 fine
• Comer cited a suspicious leveraged short position on Hyperliquid placed minutes before an unannounced presidential decision on U.S. tariffs in October 2025, executed on a platform with apparently no identity verification

Summary: House Expands Prediction Market Insider Trading Investigation

Rep. James Comer (R-KY), Chair of the House Oversight Committee, has expanded his investigation into insider trading on prediction market platforms, targeting three additional companies: Hyperliquid, Crypto.com, and Aristotle Exchange Inc. (owner of Interactive Brokers' platform).

Key Developments:

• Comer sent letters Tuesday requesting information on identity verification procedures and insider trading prevention measures
• The investigation, initially launched in May targeting Kalshi and Polymarket, has yielded nearly 1,000 documents and five briefings
• Committee continues active investigations into the two largest prediction market platforms

Notable Insider Trading Incidents:

• April: Trader earned approximately $400,000 using inside information about Venezuelan leader's ouster
• May: Over 80 Polymarket users placed suspicious bets on international events
• October 2025: Suspicious leveraged short position on Hyperliquid platform placed minutes before undisclosed presidential announcement regarding U.S. operations
• Former Rep. George Santos allegedly bet on his own State of the Union attendance in February; Kalshi banned and fined him $71,356 in August

Market Context:

Prediction markets—allowing users to trade binary event contracts on future outcomes ranging from sports to geopolitical events—have gained mainstream attention and regulatory scrutiny as their popularity grows. Both Kalshi and Polymarket announced strengthened insider trading rules earlier this year.

Regulatory Focus:

Comer emphasized concerns about "bad actors" exploiting platforms for thousands of dollars using nonpublic information, questioning whether platforms fulfill legal obligations. The committee specifically requested documentation on know-your-customer (KYC) policies and procedures for detecting and reporting suspicious activity.

*Note: CNBC has commercial ties with Kalshi, including customer acquisition and minority investment.*