US House Oversight Committee launches insider trading investigation into Polymarket and Kalshi

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, which zeroes in on trading patterns that appeared suspiciously well-timed around major geopolitical events.

What triggered the probe

The investigation, announced on May 22, 2026, was prompted by identifiable patterns of suspicious trades that appeared to correlate with significant geopolitical developments. Two events drew particular scrutiny: the Iran conflict and the alleged capture of Nicolás Maduro, former leader of Venezuela.

Comer has sent document requests to Polymarket CEO Shayne Coplan and Kalshi CEO Tarek Mansour. The requests cover user identity verification procedures, geographic restrictions on trading, internal detection systems for suspicious activity, and safeguards against the exploitation of nonpublic information.

Both platforms have until June 5, 2026 to respond.

A bipartisan trail of breadcrumbs

On May 11, 2026, Rep. Chris Pappas (D-NH) pushed for subpoenas and legislative measures specifically designed to prevent federal employees from trading on nonpublic information through prediction markets.

Senator Elizabeth Warren had already flagged the issue even earlier. On March 30, 2026, she sent a letter to regulators highlighting concerns over insider trading on these platforms.

The core legal concept at play is material nonpublic information, or MNPI. In traditional securities markets, trading on MNPI is a felony. The question now is whether prediction markets, which operate in a regulatory gray zone, should be held to the same standard.

What this means for prediction markets and their users

Several lawmakers have floated the idea of new laws that would explicitly restrict Members of Congress and federal employees from trading on prediction market platforms, at least where those trades could be informed by access to classified or sensitive government information. If such legislation passes, it would carve out an entirely new category of prohibited trading activity that doesn’t currently exist in federal law.

The June 5 deadline for platform responses will be the next inflection point. What Polymarket and Kalshi disclose, or decline to disclose, will shape the trajectory of this investigation and potentially determine whether Congress moves from inquiry to legislation.

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