The U.S. House of Representatives plans to launch an insider trading investigation into prediction market firms Polymarket and Kalshi.

On May 23, CoinDesk reported that the U.S. House Oversight Committee intends to investigate prediction market platforms. This action stems from concerns that U.S. government employees might have exploited insider information to profit from policy decisions and national security events. Representative James Comer, a Republican from Kentucky and the chairman of the House Oversight and Government Reform Committee, revealed on CNBC's "Squawk Box" that he is examining internal records from the CEOs of Polymarket and Kalshi. The goal is to ascertain if government employees have used non-public information for financial gain related to policy, geopolitical, and military operations. Comer also suggested the possibility of advocating for legislation to prohibit members of Congress, government officials, and other federal employees from participating in prediction markets. This inquiry arises amidst the rapid expansion of prediction markets, which are facing increasing scrutiny from both major political parties in Congress. Lawmakers and experts have voiced concerns regarding national security risks, the potential for insider trading, and issues related to gambling within this burgeoning industry.