Republican Rep. James Comer, R-Ky., launched a congressional investigation Friday into alleged insider trading and market manipulation on online prediction markets.

Comer, chair of the House Committee on Oversight and Government Reform, sent letters to prediction market platforms Kalshi and Polymarket seeking documents and information about how the companies monitor suspicious trades, verify users and prevent insider trading.

“We are examining the adequacy of company safeguards to prevent access to offshore sites to circumvent compliance with applicable U.S. federal regulations governing prediction market platforms,” Comer said in the letters.

“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,” he said.

Comer said the committee is investigating whether users are exploiting classified information to trade on sensitive events, including military operations and political developments. He also raised concerns about whether offshore users are circumventing U.S. regulations through anonymous or foreign accounts.

“This growing pattern of insider trading activity on prediction market platforms indicates that Congressional action may be necessary,” Comer said.

Comer’s letters request information about identity verification procedures for domestic and international users, enforcement of geographic restrictions and how the companies detect “anomalous trading activity.” The committee also asked whether current safeguards are sufficient to stop government officials or insiders from using privileged information for financial gain.

Kalshi said it plans to cooperate with the committee and defended its “comprehensive protections against insider trading.”

Polymarket said in a statement that it maintains a “comprehensive market integrity framework.”

“We look forward to engaging with Chairman Comer and the committee on how our platform is a pioneer in transparency,” a spokesperson for Polymarket said.

Recommended

Ebony Davis

Ebony Davis is a breaking news reporter for MS NOW based in Washington, D.C. She previously worked at CNN as a campaign reporter covering elections and politics.