House Targets Hyperliquid in Insider Trading Probe, Cites $1.1B Crypto Short Before Trump Tariffs

House Oversight Chairman James Comer (R-Ky.) expanded the committee’s prediction market insider trading investigation Tuesday to Hyperliquid Labs, citing a $1.1 billion crypto short opened before President Donald Trump announced new tariffs on China last year. Comer sent letters to Hyperliquid Labs, Crypto.com and Aristotle Exchange, which operates PredictIt, seeking records on identity verification and how the platforms detect suspicious trading involving nonpublic or classified information. The companies have until Oct. 13 to respond. Comer also questioned whether Hyperliquid had adequate identity checks or a clear process for referring suspicious traders to U.S. law enforcement. The letter does not identify the trader or say Congress has established that the trader knew about Trump’s decision in advance. Trader Made More Than $150M on Crypto Short The trader built a roughly $1.1 billion short across Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) perpetual futures—leveraged crypto derivatives that have no expiry date—about 30 hours before Trump’s announcement, according to an analysis cited by Congress. The Block reported that the trader continued adding to the position until just before the announcement, with the final short placed about one minute before Trump’s Truth Social post, and that the trade generated more than $150 million in profit. Hyperliquid’s Prediction Market Push Draws Scrutiny The $1.1 billion trade was in crypto derivatives, not a prediction market. But Hyperliquid has since moved into event trading. Its HIP-4 markets, launched in May, let users trade on outcomes such as inflation and interest-rate decisions, The Block reported. Comer wants records on Hyperliquid markets tied to Fed decisions, elections and geopolitical events, including any trades the company flagged as suspicious. He is also asking whether any current or former Hyperliquid employees or advisers hold, or have applied for, U.S. government security clearances. The letter points to the April indictment of Army Master Sgt. Gannon Ken Van Dyke, who prosecutors allege used classified information about the operation to capture Nicolás Maduro to make more than $409,000 on Polymarket. The investigation began in May with Polymarket and Kalshi. The committee says the companies have since provided nearly 1,000 documents and five briefings. Hyperliquid Strategies Inc. (NASDAQ:PURR), a separate publicly traded company focused on the Hyperliquid ecosystem, held about 33.6 million HYPE tokens. Kalshi and Benzinga have an existing data collaboration agreement. Image: Shutterstock Read Also: Steve Eisman Says AI Boom Is ‘For Real’ as Cisco Growth Hits 18%: Here’s What Could Derail It