Rep. James Comer, the chair of the House Oversight and Government Reform Committee, announced on CNBC's 'Squawk Box' that he is seeking information from the CEOs of Kalshi and Polymarket regarding their measures to prevent insider trading.
This investigation is part of a broader congressional effort to regulate prediction markets, which have gained popularity but also raised concerns about transparency and accountability. Comer emphasized the importance of internal records in identifying bad actors and ensuring compliance with legal obligations.
He sent letters to both CEOs requesting details on identity verification processes, enforcement of geographic restrictions, and detection of unusual trading activities. The scrutiny comes after incidents of suspicious trades, including a U.S. soldier allegedly using insider information to profit from bets on Polymarket.
Both companies have previously announced efforts to strengthen their internal rules against insider trading. The investigation reflects a growing bipartisan concern in Congress about the integrity of prediction markets, especially as they expand globally and attract users who may exploit their anonymity.
Comer has requested documentation from both companies by June 5, indicating that this inquiry could lead to significant regulatory changes in the sector