According to Woofun AI, on October 10, 2025, as President Trump declared that China would face a 100% tariff, the cryptocurrency market experienced severe turbulence and a sharp decline.
In response to this market anomaly, House Oversight Committee Chairman James Comer formally launched an insider trading investigation, alleging that a trader on the Hyperliquid platform had anticipated the price movement in advance and profited from it, directly dragging Hyperliquid, Crypto.com, and PredictIt into the center of a regulatory storm.
Comer pointed out that the relevant short-selling operations were initiated before the tariff news became public, and their pattern closely matched insider trading in the prediction market space, marking a deep extension of Congress's regulatory reach into the decentralized derivatives market.
The specific trading details on the Hyperliquid platform revealed astonishing profit scale and identity questions. Data compiled by Woofun AI shows that the wallet involved increased its position within one minute before Trump released the news, and then as a total of $19 billion in leveraged bets all lost money, that wallet profited more than $150 million.
According to analysis by Investing.com, the largest Hyperliquid short order tracked that day involved approximately $1.1 billion worth of Bitcoin and Ethereum.
On-chain analysts linked the mysterious wallet to former BitForex CEO Garrett Jin, known as the "whale." Jin denied insider trading and argued that the trades were made to serve clients.
However, public blockchain records show that this whale, who holds more than 100,000 Bitcoins, recently sold $4.23 billion worth of Bitcoin to buy Ethereum, and was also the same person who placed that $735 million Bitcoin short order.
Although all Hyperliquid trades are recorded on the public blockchain and wallet addresses are visible, the identity of the operator behind them remains hidden, and the platform apparently lacks an effective identity verification mechanism, making it impossible to refer the parties involved to U.S. law enforcement.
The scope of the investigation quickly expanded to other platforms with similar business characteristics, highlighting the widespread nature of regulatory loopholes.
Comer sent letters to Crypto.com and Aristotle Exchange, the operator of PredictIt, requesting explanations of their compliance practices. Crypto.com, through its regulated prediction business, allows U.S. users to bet on political, sports, and economic events; PredictIt has provided political betting services since 2014.
Comer stressed that these platforms must submit their KYC (Know Your Customer) identity verification materials and explain in detail how they identify suspicious trading activity.
Currently, Kalshi and Polymarket have submitted nearly 1,000 related documents to cooperate with the investigation.
In the letters, Comer criticized that with the growing popularity of online prediction platforms, bad actors use non-public information to place bets and earn huge profits, while decentralized platforms such as Hyperliquid, lacking KYC mechanisms, have become breeding grounds for insider trading, with trading patterns identical to the violations in the prediction market space that the committee is investigating.
This investigation is not an isolated event, but builds on previous regulatory precedents for prediction markets.
In May of this year, Comer first launched an investigation into Kalshi and Polymarket, against the backdrop of a soldier being prosecuted in April for using inside information to profit about $400,000 in bets related to Maduro. In addition, Kalshi had imposed a lifetime trading ban on George Santos for betting on his own State of the Union address.
These cases show that speculation using undisclosed information has become a systemic risk.
Comer added that as online prediction platforms grow and become more widespread, regulation must keep pace with technological evolution to prevent the abuse of non-public information.
This intervention into Hyperliquid marks an attempt by the U.S. Congress to fill the regulatory gap between decentralized finance and traditional prediction markets, and more anonymous trading platforms may face similar compliance reviews and legal accountability in the future.
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