House expands prediction market insider trading probe to Hyperliquid and Crypto.com

The House Oversight Committee has expanded its investigation into potential insider trading on prediction markets, requesting records from Hyperliquid Labs, Crypto.com and Aristotle-linked prediction market operations.

Committee Chairman James Comer sent letters Tuesday seeking information on how the platforms verify users, enforce geographic restrictions and detect trades that may involve nonpublic or classified government information. The requests cover records dating back to January 2024 and set an October 13 deadline for responses.

The probe began in May with Polymarket and Kalshi, when Comer asked the two platforms for documents detailing their know-your-customer procedures, suspicious trading controls and methods for restricting access in prohibited jurisdictions.

The committee said Monday that it has since received nearly 1,000 documents and five briefings from representatives of Polymarket and Kalshi as it continues examining whether prediction markets have adequate safeguards against traders using sensitive information.

The latest letters extend that scrutiny beyond dedicated prediction market platforms.

For Hyperliquid, lawmakers specifically pointed to a large leveraged crypto short opened before President Donald Trump announced new China tariffs in October 2025. Public blockchain data showed a trader opened roughly $1.1 billion in leveraged Bitcoin and Ether shorts about 30 hours before the announcement and later closed the positions for more than $150 million in profit.

The committee cited the timing as one transaction it wants Hyperliquid to address; it has not established that the trader possessed nonpublic government information.

Comer is asking Hyperliquid for records describing its identity verification procedures, geographic controls and systems for flagging anomalous trades. The committee also wants information on suspicious trading tied to Federal Reserve decisions, elections and geopolitical events.

Crypto.com received a similar request covering its international platform and Crypto.com Derivatives North America. Lawmakers are seeking records on KYC procedures, suspicious activity referrals and internal restrictions designed to prevent employees with confidential information from trading related event contracts.

The committee also sent a request involving PredictIt and Aristotle-related entities, seeking details on identity verification, suspicious trading controls and political event contracts. PredictIt operates political prediction markets under a separate CFTC no-action framework. Aristotle’s exchange entities were acquired by Underdog earlier this year.

The broader inquiry follows several cases that have intensified concerns about the use of privileged information on prediction markets.

In April, federal prosecutors charged U.S. Army Master Sergeant Gannon Ken Van Dyke with allegedly using classified information about the military operation that led to Nicolás Maduro’s removal from power to make roughly $400,000 in prediction market profits on Polymarket. The charges remain allegations, and the case has not resulted in a conviction.

A month later, prosecutors separately charged a Google engineer with allegedly using confidential company data to make about $1.2 million through Polymarket wagers. Polymarket cooperated with authorities in that investigation.

Prediction markets have also been drawing greater scrutiny as they expand into politics, sports, equities and other financial events. The CFTC regulates federally registered event-contract venues, while lawmakers, state regulators and the SEC continue debating where parts of the rapidly growing sector fit within existing financial and gambling rules.