US Congress Launches Insider Trading Probe Into Polymarket and Kalshi

TLDR

• House Oversight Committee Chair James Comer sent letters to the CEOs of Polymarket and Kalshi demanding internal records on insider trading.
• Over 80 suspiciously timed trades were placed on Polymarket ahead of US military operations against Iran, with a reported 98% win rate.
• A US Army soldier faces criminal charges for allegedly using classified information to profit over $400,000 on Polymarket trades related to Venezuela.
• Comer has signaled he may push for legislation banning members of Congress and government employees from using prediction markets.
• Prediction market volumes hit $51 billion in 2025 and could reach $240 billion in 2026, according to a Bernstein report.

House Oversight Committee Chair James Comer is demanding internal records from the CEOs of two major prediction market platforms over concerns that government insiders may be profiting from classified information.

In letters sent Friday to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour, Comer asked for details on how each platform handles identity verification, enforces geographic restrictions, and flags unusual trading activity.

The probe centers on more than 80 trades flagged as suspiciously timed ahead of US military operations against Iran. A May 13 New York Times report detailed incidents involving bets on Israel’s actions against Iran, a Trump-announced ceasefire, and congressional election contracts.

Soldier Faces Charges Over Venezuela Bet

The probe follows a criminal indictment in April against US Army Master Sergeant Gannon Ken Van Dyke. Prosecutors allege he used classified information from a military operation involving Venezuelan President Nicolás Maduro to profit more than $400,000 on Polymarket event contracts.

Van Dyke pleaded not guilty to charges including commodities fraud and unlawful use of confidential government information. He was released on $250,000 bail.

Both Polymarket and Kalshi pushed back on the scrutiny. Polymarket said it “maintains a comprehensive market integrity framework” and would cooperate with the committee. Kalshi said it was “proud of its comprehensive protections against insider trading” and would also engage with lawmakers.

Senate Scrutiny Follows Closely

The House probe came just two days after a Senate Commerce Committee hearing where lawmakers from both parties grilled prediction market platforms. Senate Commerce Chair Ted Cruz criticized the industry for enabling cheating scandals in sports, while Senator John Hickenlooper accused companies of targeting young people through aggressive social media marketing.

Polymarket updated its approach to potential insider trading in March. Kalshi banned three US politicians in April for betting on their own races.

Comer said he may push for legislation that would bar members of Congress, administration officials, and other government employees from participating in prediction markets.

Prediction market volumes reached $51 billion in 2025 and could hit $240 billion in 2026, according to a Wall Street Bernstein report. The sector is projected to grow to roughly $1 trillion by 2030.

Vaiman warned that irregular trades visible to researchers are also visible to US adversaries, raising national security concerns that go beyond financial regulation.

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