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Bonus TL;DR
- A prominent congressional committee expanded its investigation into prediction markets by requesting suspicious trading records from three notable platforms.
- Lawmakers are specifically exploring whether government officials or corporate insiders utilized nonpublic regulatory information to unfairly manipulate event contracts.
House Oversight Committee Chair James Comer has asked Crypto.com, Hyperliquid and PredictIt to turn over records on user identity checks, suspicious trades and possible use of nonpublic information on prediction market platforms.
The requests widen a congressional probe into whether online prediction markets have adequate controls to detect insider trading and other suspicious activity. Comer said the investigation could help inform legislation, including a possible ban on government officials trading on these platforms.
In letters sent Tuesday, Comer asked the companies for details on the tools they use to verify users and flag suspicious activity. He also requested information on any referrals they have made to regulators or law enforcement over the past two and a half years.
Comer said in a statement quoted by The Block: “As online prediction platforms grow and become more mainstream, some bad actors have exploited the platforms to make thousands of dollars by placing bets based on nonpublic information.”
What Comer wants from each platform
According to The Block, the requests were tailored to each company.
For Crypto.com, Comer asked whether employees of any affiliates traded contracts tied to corporate decisions known internally before becoming public, including token listings or custody decisions. He also sought records involving any government officials who may have traded on contracts linked to crypto regulation or the exchange’s regulatory status.
For Hyperliquid, the letter focused on a reported large leveraged short position placed before a major U.S. tariff announcement in October last year.
For PredictIt, Comer requested information on trades tied to elections, nominations and other government actions involving current or former officials.
Probe extends earlier requests to Kalshi and Polymarket
The latest letters build on an investigation Comer launched in May with requests to Kalshi and Polymarket. The committee said it has since received nearly 1,000 documents and multiple briefings from representatives of those companies.
That earlier document production appears to have given the committee a broader view of how prediction market platforms monitor trading activity, verify users and handle potential referrals to authorities.
The Block reported that it contacted Crypto.com, Hyperliquid and PredictIt for comment but did not receive responses by publication time.
What comes next is whether the three companies comply with the records requests and whether Comer uses the findings to advance legislation affecting prediction market participation by government officials. For operators, the probe puts added attention on know-your-customer procedures, market surveillance tools and escalation policies for suspicious trading.
