Rep. James Comer (R-Ky.), Chairman of the House Oversight and Government Reform Committee, opened a formal investigation into prediction market platforms Kalshi and Polymarket on May 22. The central question: whether users on these platforms have been placing bets based on nonpublic or classified government information.

Comer has given both CEOs, Kalshi’s Tarek Mansour and Polymarket’s Shayne Coplan, until June 5 to hand over internal records. The requested documents cover identity verification processes, geographic restrictions on users, and whatever systems these platforms have in place to detect anomalous trading activity.

The trades that triggered the probe

The most striking case involves a US Army soldier who allegedly pocketed $400,000 on Polymarket contracts tied to the capture of Venezuelan President Nicolás Maduro. There were also reports of large bets being placed ahead of military actions involving Iran. The New York Times published an article on May 13 highlighting signs of insider trading on Polymarket bets.

In April, three congressional candidates were fined and suspended by Kalshi for betting on their own races.

Regulatory pressure was already building

The Commodity Futures Trading Commission issued an advisory on February 25 reinforcing existing prohibitions against insider trading on these platforms. Both Kalshi and Polymarket have responded to the growing scrutiny by tightening their own rules, restricting participation by politicians and public officials.

What this means for prediction market users and crypto investors

Kalshi operates as a CFTC-regulated exchange with centralized infrastructure, which means complying with new disclosure or surveillance requirements is operationally feasible. Polymarket’s crypto-native design presents a different challenge. Blockchain-based platforms can implement front-end restrictions, but enforcing identity-based bans on a permissionless protocol is a fundamentally harder problem.

Investors watching this space should pay close attention to the June 5 deadline. The nature and scope of the documents Kalshi and Polymarket produce will signal how cooperative, or combative, these platforms intend to be.