Polymarket is facing a focused federal inquiry into how it monitors suspicious trading after the House Oversight Committee asked the company for internal records tied to possible insider dealing. The reported requests cover identity checks, geographic restrictions, account controls, and the systems used to detect unusual wagers that could point to trading on non-public information. Kalshi was also included, and reported coverage said the firms were asked to turn over materials by June 5.
The core issue is whether these platforms have the surveillance, access controls, and escalation procedures expected when a venue handles markets tied to real-world events. Recent reporting also highlighted suspicious Iran-related wagers on Polymarket, adding to concerns about event-driven trading around sensitive geopolitical developments.
On a second front, Polymarket and Kalshi just lost an attempt in the Ninth Circuit to pause ongoing state legal actions in Nevada and Washington. Federal judges rejected the argument that federal compliance should shield them from those state cases. Between the federal inquiry into trading controls and the continuing litigation, prediction markets are facing tougher questions about oversight as they move closer to the standards expected of regulated venues.