The U.S. House Oversight Committee has opened an investigation into insider trading risks on Polymarket and Kalshi. The probe focuses on whether users on prediction markets may have used nonpublic information tied to military actions and political events for profit.
As per the official release, Committee Chairman James Comer sent letters to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour. He requested documents on user checks, location controls, and systems used to detect suspicious trades.
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Prediction Market Compliance Faces Review
The committee is considering whether there might be risks of insider trading in prediction markets due to weak compliance systems. Lawmakers are considering event-based contracts that could contain sensitive or classified data.
The committee said the New York Times investigation identified over 80 Polymarket trading accounts with “unusual trading patterns.” Some of the bets came just before secret U.S. and Israeli military strikes against Iran.
Lawmakers said the timing of those bets raised concerns about platform safeguards. They want to find out if existing monitoring systems can detect trades based on private or restricted information.
The letters also referred to a federal indictment of U.S. Army Master Sergeant Gannon Ken Van Dyke that was issued in April 2026. Van Dyke allegedly used classified information associated with “Operation Absolute Resolve” while trading on Polymarket.
Political Event Contracts Raise Conflict Concerns
The committee’s letter said that the operation resulted in the arrest of Venezuela’s President, Nicolas Maduro. According to prosecutors, the trades yielded profits of over $409,000.
Kalshi has also been mentioned in regard to political event contracts. The committee noted that reports indicate that in 2025, Kyle Langford, gubernatorial candidate, bet on his own race through the platform.
Lawmakers also referred to instances of other political candidates selling contracts linked to their own political campaigns earlier this year. These cases bring up larger issues relating to conflicts of interest in prediction markets, the committee said.
The House committee requested the two companies to submit their internal paperwork from January 2024 until now. The deadline for the requested responses is June 5, 2026.
Documents being requested include Know Your Customer procedures and identity verification systems. The committee also asked for literature about suspicious activity monitoring and/or communication with regulators or law enforcement agencies.
Kalshi Global Access Raises Compliance Concerns
Members of Congress asked for documents concerning contracts related to military activities involving Iran. They also requested documents in relation to the Maduro operation and related trading activity.
The committee asked about the international access for Kalshi. The letter highlighted concerns since the platform is said to have expanded to over 140 countries in 2025.
The global expansion of event trading could leave regulatory loopholes, the committee said. It cautioned that sophisticated actors could take advantage of those gaps if the platforms are not well equipped with oversight tools.
The investigation will help identify if Congress should take action, Comer said. He wrote that the growing pattern of insider trading activity on prediction markets may require congressional action.
The committee also requested both companies submit a record of market integrity risks. It seeks information on the impact of the potential problematic trades on public reputation, regulatory obligations, and the trust in prediction markets.
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