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U.S. House Expands Insider Trading Probe to Hyperliquid and Crypto.com
The House Oversight Committee in the United States has broadened its investigation into potential insider trading on prediction markets, now including Hyperliquid Labs and Crypto.com among the platforms under scrutiny. Lawmakers are seeking detailed records regarding user identity verification, geographic restrictions, and mechanisms for detecting suspicious trading activities. This expanded inquiry follows an initial investigation that began in May, focusing on Polymarket and Kalshi, which has already yielded nearly 1,000 documents and multiple briefings from those platforms.
Committee Chairman James Comer has set an October 13 deadline for the requested information, which covers records dating back to January 2024. The committee is particularly interested in Hyperliquid due to a significant leveraged crypto short position that was opened shortly before former President Donald Trump announced new tariffs on China in October 2025. The transaction, involving approximately $1.1 billion in leveraged Bitcoin and Ether shorts, raised concerns about whether the trader had access to nonpublic government information, although no such connection has been established yet.
Crypto.com has also received a similar request for information regarding its international platform and its derivatives operations in North America. Lawmakers are examining the platform's know-your-customer (KYC) procedures and internal controls designed to prevent insider trading. Additionally, the committee is looking into PredictIt and Aristotle-related entities, seeking information on their identity verification processes and controls against suspicious trading activities.
The investigation comes amid rising concerns about the use of privileged information in prediction markets, particularly as these platforms expand into various sectors including politics and finance. Recent cases have highlighted the potential for insider trading, with federal prosecutors charging individuals for allegedly profiting from classified information related to military operations and corporate data. As the regulatory landscape evolves, the Commodity Futures Trading Commission (CFTC) and other authorities continue to assess how these markets fit within existing financial and gambling regulations.
Source: KLEA News