Rep. James Comer (R-Ky.) speaks to reporters after leaving the House Republican weekly caucus meeting at the Capitol on September 9, 2025 in Washington, DC.
Anna Moneymaker | Getty Images
Representative James Comer, chairman of the House Oversight Committee, is expanding his investigation into insider trading in prediction markets and seeking information about what the three online platforms are doing to root out insider trading.
In a letter sent Tuesday and first shared with CNBC, the Kentucky Republican requested documents and information from the CEO of Aristotle Exchange Inc., which owns Hyperliquid Labs, Crypto.com, and the platform PredictIt, explaining its identity verification procedures and how it identifies and prevents insider trading on its platforms.
“As online prediction platforms grow and become mainstream, some bad actors have exploited them and made thousands of dollars by placing bets based on non-public information,” Comer said in a statement. “The House Oversight Committee is investigating whether these platforms are meeting their legal obligations and taking sufficient steps to proactively identify and prevent insider trading.”
Prediction markets, which allow users to buy and sell binary event contracts on the outcome of future events, from sports games to elections and even wars and other world events, have soared in popularity and are attracting more attention from lawmakers.
Comer first began researching two of the largest and most prominent prediction markets, Calsi and Polymarket, in May amid a series of highly publicized bets on world events. A committee spokesperson said these investigations are ongoing and the committee has received nearly 1,000 documents and five briefings from representatives of both companies.
In April, a U.S. soldier was arrested on suspicion of using inside information to bet on the January ouster of former Venezuelan leader Nicolas Maduro in a polymarket that netted him about $400,000. A New York Times investigation in May also found that more than 80 Polymarket users had placed bets with suspicious characteristics, including trades made hours before the US and Israel attacked Iran.
Former New York Republican Rep. George Santos, who was expelled from the House by his colleagues in 2023, is said to have used Carsi in February to gamble on whether he would attend this year’s State of the Union address, before making a series of public statements suggesting he would be in the audience.
Carsi permanently banned Santos in August and fined him $71,356 for his actions. Both Carsi and Polymarket announced earlier this year that they would be tightening their internal insider trading rules.
But the transactions raising insider trading concerns are not unique to the largest platforms.
In a letter to HyperLiquid CEO Jeff Yang, Comer cited reports of “significantly leveraged short positions on the platform that were not publicly known at the time the positions were established within minutes of the President’s announcement regarding October 2025 U.S. tariff policy.”
“This trade, timed precisely to the government’s non-disclosure decision and executed on a platform with no apparent mechanism for identifying or referring those responsible to U.S. law enforcement, reflects a pattern of insider trading that the Commission is investigating across the prediction markets space,” Comer said in the letter.
Spokespeople for HyperLiquid, Crypto.com and Aristotle Exchange did not immediately respond to requests for comment on Tuesday.
Comer and the committee requested documents and communications from each company explaining their know-your-customer (KYC), policies, and internal procedures for detecting, investigating, and reporting suspicious trading activity.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
