15 October 2026
Congress Expands Investigation into Prediction Market Platforms Over Insider Trading Allegations
In a significant move, House Oversight Chairman James Comer has broadened the congressional investigation into insider trading within prediction markets, focusing on three platforms: Hyperliquid, Crypto.com, and Predictit. Lawmakers have set a deadline of October 13 for these companies to submit detailed records regarding their trading practices and compliance measures.
This inquiry follows serious allegations that a U.S. Army master sergeant profited over $409,000 by betting on classified military intelligence through Polymarket. The investigation, which began in May 2026, aims to determine whether these platforms are effectively preventing government employees and contractors from exploiting privileged information.
Comer highlighted the growing concerns about the integrity of online prediction markets, stating, “Americans deserve to know that these platforms are taking steps to prevent insider trading.” The investigation has already collected nearly 1,000 documents and conducted five briefings with representatives from Polymarket and Kalshi.
One particularly alarming case involves Hyperliquid, which is under scrutiny for a $1.1 billion leveraged short position that reportedly generated over $150 million in profit shortly before a major tariff announcement. Congress is questioning whether the trader had prior knowledge of the announcement, raising concerns about the platform's identity verification and suspicious activity reporting protocols.
Crypto.com and Predictit are also facing specific inquiries. Crypto.com is being asked to clarify its identity verification processes, while Predictit must address issues related to political-event trading and its decision to remove per-contract trader limits, which may have impacted liquidity and insider trading detection.
As the investigation unfolds, the implications for prediction market regulation could be substantial, potentially leading to new legislative measures aimed at ensuring fair trading practices in the crypto space.
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