House Oversight widens prediction-market probe to Hyperliquid, Crypto.com
DeFi & Yields ·
Rep. James Comer has sent letters demanding records from three additional platforms as part of an ongoing congressional inquiry into insider trading on event-betting markets.
Comer, who chairs the House Oversight Committee, dispatched letters on Tuesday to the chief executives of Hyperliquid Labs, Crypto.com and Aristotle Exchange Inc., the company behind PredictIt, asking each to detail their identity-verification practices and how they detect and prevent trading on nonpublic information, according to CNBC. The move builds on an investigation Comer opened in May into Kalshi and Polymarket, which a committee spokesperson said remains active and has so far produced nearly 1,000 documents and five briefings from the two firms.
At the center of the newly added scrutiny is a specific episode flagged in Comer's letter to Hyperliquid chief executive Jeff Yan: a large leveraged short position placed on the platform within minutes of an October 2025 presidential tariff announcement, before the decision was public knowledge. Comer described the timing as mirroring a broader pattern the committee has observed across prediction markets, and noted the trade occurred on a platform he said had no apparent identity checks or process for referring suspicious activity to law enforcement.
The expansion follows earlier cases that drew regulatory attention to the sector. A U.S. soldier was arrested in April over bets placed on Polymarket tied to the ouster of former Venezuelan leader Nicolás Maduro, allegedly netting roughly $400,000 using inside information. A separate review by The New York Times in May identified more than 80 Polymarket users whose trades showed suspicious patterns, including wagers placed hours ahead of the U.S. and Israeli strikes on Iran. Former Rep. George Santos was also accused of using Kalshi to bet on his own appearance at this year's State of the Union, prompting Kalshi to ban him permanently in August and impose a $71,356 fine.
Both Kalshi and Polymarket have said they tightened internal safeguards against insider trading earlier this year. Hyperliquid, Crypto.com and Aristotle Exchange had not responded to requests for comment as of Tuesday, and it is not yet clear what documentation the companies will turn over or on what timeline. Whether the committee's findings lead to formal enforcement referrals, new legislation, or platform-level policy changes remains unresolved.