House Oversight Committee probes Kalshi, Polymarket over insider trading concerns

Investing.com -- The House Oversight Committee is investigating Kalshi and Polymarket over concerns that customers may be using non-public information for insider trading on the prediction market platforms.

House Oversight Chairman James Comer requested documents from Polymarket's Shayne Coplan and Kalshi's Tarek Mansour on Friday to evaluate how the platforms verify account holder identities, enforce geographic restrictions and monitor suspicious trading activity.

Prediction markets, which permit users to bet on various outcomes, have grown in popularity over the past 18 months. Critics contend some profitable bets appear too accurate to be based on chance alone.

In April, a US soldier was charged with using classified information about the timing of the capture of then-Venezuelan President Nicolás Maduro to make more than $400,000 trading on Polymarket. The company said it identified a trader using classified information and referred the matter to the Justice Department.

Kalshi announced that month it had suspended and fined three congressional candidates for political insider trading on bets related to their own campaigns. The firm said it was committed to policing unfair or improper trading on its platform.

Comer referenced those cases on Friday and said "this growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary."

Concerns about potential insider trading have increased this year following a series of suspiciously timed trades ahead of President Donald Trump's policy announcements. Lawmakers have flagged the unusual trading activity and asked regulators to investigate.

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