The US House Oversight and Government Reform Committee has opened a formal investigation into potential insider trading on prediction market platforms Polymarket and Kalshi. Chairman Rep. James Comer (R-KY) is leading the inquiry, focusing on trades that appear suspiciously well-timed around major geopolitical events.
The investigation, announced on May 22, 2026, was triggered by identifiable patterns of suspicious trades correlating with significant geopolitical developments, particularly the Iran conflict and the alleged capture of Venezuelan leader Nicolás Maduro.
Comer has sent document requests to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour, covering user identity verification, geographic restrictions, and internal detection systems for suspicious activity. Both platforms must respond by June 5, 2026.
The core legal issue is material nonpublic information (MNPI). Trading on MNPI is a felony in traditional securities markets, but prediction markets operate in a regulatory gray zone. Lawmakers are considering new laws to restrict Members of Congress and federal employees from trading on these platforms if informed by classified information.
This investigation could determine whether Congress moves from inquiry to legislation, creating a new category of prohibited trading activity.