Washington D.C. – Congress is calling for a thorough investigation into the prediction market platform Polymarket following reports of suspicious trading activity linked to major geopolitical events. Lawmakers are concerned about potential insider trading and the exploitation of sensitive national security information.

Escalating Concerns in Congress

Calls for an investigation are growing within Congress after strategically timed bets were placed on significant geopolitical events just before they occurred. The Associated Press reported that numerous new Polymarket accounts placed substantial bets on a U.S.-Iran ceasefire in the hours, and even minutes, leading up to President Donald Trump’s announcement on Tuesday. These were the only wagers made by these accounts.

Past Instances of Suspicious Activity

This isn't the first time Polymarket has faced scrutiny. In January, an anonymous user reportedly profited US$400,000 by correctly predicting the removal of Venezuelan leader Nicolas Maduro hours before his capture. Another account made approximately US$550,000 betting on a U.S. strike against Iran and the removal of Ayatollah Ali Khamenei.

Harvard Research Highlights Potential Profits

A recent report from Harvard University researchers estimated that individuals potentially using insider information have generated US$143 million in profits on Polymarket. These wagers covered a wide range of events, including Taylor Swift’s engagement and the Nobel Peace Prize awards.

Official Requests for Investigation

Representative Ritchie Torres, a member of the House Financial Services Committee, has formally requested that the Commodity Futures Trading Commission (CFTC) investigate these occurrences. In a letter to the CFTC, Torres stated, “This pattern raises serious concerns that certain market participants may have had access to material nonpublic information regarding a market-moving geopolitical event.” He questioned the statistical probability of such accurate bets, suggesting insider trading.

Polymarket's Operations and Regulatory Status

Prediction market platforms like Kalshi and Polymarket allow users to wager on various outcomes, from weather forecasts to Federal Reserve interest rate adjustments. Polymarket has been restricted in the U.S. since 2022 but is attempting to re-enter the market by acquiring a CFTC-licensed exchange and clearing house.

The company has initiated a limited rollout in the U.S., but the majority of its activity still occurs on a separate, offshore crypto-based platform outside U.S. jurisdiction.

Bipartisan Concerns and Calls for Action

Senator Richard Blumenthal has also expressed concerns in a letter to Polymarket, inquiring about policies regarding trades on war and violence and measures to prevent insider trading. He warned that Polymarket could become a platform for exploiting national security secrets and attracting foreign intelligence services.

Republicans have also criticized the platform and are supporting bipartisan bills to ban such wagers. Representative Blake Moore voiced concerns that adversaries could use these platforms to anticipate U.S. actions.

Polymarket has not yet responded to requests for comment. The ability to operate legally within the U.S. market is crucial for both Kalshi and Polymarket, particularly given the potential within the sports betting sector. Kalshi is already regulated in the U.S. and aims to become the leading prediction market in the nation.