Posted on: May 27, 2026, 07:25h.
Last updated on: May 27, 2026, 07:25h.
The House Oversight Committee is reviewing the prevalence of insider trading on prediction markets Kalshi and Polymarket have been asked to turn over internal documentsIn April, the Department of Justice brought charges against a US Army master sergeant on allegations that he used classified data to make over $400,000 on a prediction market. One of many insider trading scandals to rock prediction markets in recent months, a powerful congressional committee is now probing the financial industry.
US Rep. James Comer presides over a House Oversight Committee hearing in Washington, DC, on Jan. 21, 2026. Comer and the committee have opened up an investigation into insider trading allegations on federally regulated prediction markets. (Image: Getty)In response to numerous complaints regarding possible insider trading on prediction markets, the House Committee on Oversight and Government Reform has launched an investigation to determine the rate of traders using nonpublic information. House Oversight Chairman James Comer (R-KY) said internal documents and information requests have been sent to Kalshi and Polymarket, the two largest online prediction market platforms.
Internal records held by prediction market platforms are the only means by which bad actors can be identified and to determine whether platforms are meeting their legal obligations,” Comer said. “The Committee requests documents and information to better understand how Polymarket and Kalshi implements identity verification for domestic and international account holders, enforces geographic restrictions, and detects anomalous trading activity to prevent insider trading.”
Prediction markets are federally regulated financial exchanges that offer swaps on various events, including sports. The platforms are regulated by the Commodity Futures Trading Commission, an independent federal agency whose critics say is unequipped to properly monitor the websites for illicit activity.
Prediction Markets Scandals
The DOJ case involves Army Master Sgt. Gannon Van Dyke, who is accused of making several perfectly timed trades, totaling $33,000, on when Venezuelan leader Nicolás Maduro would be captured and removed from power.
After media reports surfaced regarding the suspicious trades, which made Van Dyke $409,000, federal prosecutors allege he quickly deleted his Polymarket profile. Van Dyke was reportedly directly involved in Maduro’s capture.
Another investigation found more than 80 Polymarket users had placed hundreds of suspiciously timed bets on the then-undisclosed US and Israeli military operations against Iran.
Amid the war, one prediction market account made $72,000 in trades just hours before the US announced a two-week ceasefire with Iran, trades that profited $200,000. A separate Polymarket trader, who opened an account just 12 minutes before President Donald Trump announced the ceasefire, wagered almost $32,000 to profit $48,500.
On Kalshi, an editor for the popular YouTuber MrBeast, bet on content related to the channel. Kalshi later froze the account and suspended the trader.
CFTC Defers to Licensees
Comer said the House Oversight’s review will consider whether prediction markets have adequate safeguards to meet CFTC compliance minimums regarding insider trading.
Ensuring that every prediction market contract is free from insider influence is a herculean task. Most prediction markets have thousands of live contracts, with daily notional trading volume now in the billions of dollars.
David Miller, the director of enforcement at the CFTC, said earlier this year that prediction markets bear the brunt of responsibility in keeping their exchanges free of corruption.
Exchanges have important obligations under our core principles relevant to insider trading and market manipulation. Exchanges doing their job [is an] essential part of the fight against market manipulation and insider trading,” Miller said.
Miller’s comments came on March 31 at a CFTC enforcement event at NYU School of Law, his law school alma mater.
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