WASHINGTON — Rep. James Comer is expanding his House Oversight Committee investigation into insider trading on prediction markets, sending letters Tuesday to three more platforms demanding details on how they police their own users.
The Kentucky Republican requested documents from the CEOs of Hyperliquid Labs, Crypto.com, and Aristotle Exchange Inc., which owns PredictIt. The letters, first reported by CNBC, ask the companies to explain their identity verification procedures and how they detect and prevent insider trading.
"As online prediction platforms grow and become more mainstream, some bad actors have exploited the platforms to make thousands of dollars by placing bets based on nonpublic information," Comer said in a statement. "The House Oversight Committee is investigating whether these platforms are fulfilling their legal obligations and doing enough to identify and prevent insider trading before it happens."
The move widens a probe Comer opened in May into Kalshi and Polymarket, the two largest prediction markets. A committee spokesperson said those investigations remain active, with the panel having received nearly 1,000 documents and five briefings from the two companies.
Prediction markets let users buy and sell binary contracts on the outcome of future events — sports games, elections, and in some cases wars and other global developments. Their rapid growth has drawn scrutiny from lawmakers who worry the platforms are vulnerable to traders armed with inside information.
The concern is not theoretical. In April, a U.S. soldier was arrested for allegedly using inside information to bet on Polymarket about the ouster of former Venezuelan leader Nicolás Maduro.
Comer's letters give the three companies a deadline to produce records, though the committee did not release the specific date. The requests focus on the mechanics of user verification and the systems platforms use to flag suspicious trading before it happens, not just after.
Representatives for Hyperliquid Labs, Crypto.com, and Aristotle Exchange did not immediately respond to requests for comment.
The investigation puts the prediction market industry under a congressional microscope at a moment when the sector is booming. Platforms that once operated in a regulatory gray area now handle billions of dollars in wagers, and federal agencies have signaled they are paying closer attention.
Comer's panel has jurisdiction over government operations and can compel testimony and document production. Whether the investigation leads to legislation or referrals remains unclear, but the letters signal the committee intends to keep pressure on the industry through the fall.
The three new targets span a range of business models. Crypto.com is a major cryptocurrency exchange that has expanded into event contracts. PredictIt is a long-running academic prediction market that has weathered prior regulatory fights. Hyperliquid Labs operates a decentralized trading platform, a structure that could complicate questions of who is responsible for policing users.
