Giant Whale shorted 1 minute earlier: Congress expands investigation of insider trading

According to Woofun AI, on October 10, 2025, the cryptocurrency market experienced severe shocks and a sharp decline as President Trump declared that China would face 100% tariffs. In response to this market change, House Supervisory Committee Chairman James Comer officially launched an insider trading investigation, accusing traders on the Hyperliquid platform of predicting trends and profiting in advance. This move directly involved the three platforms Hyperliquid, Crypto.com, and PredictIT at the core of the regulatory storm. Comer pointed out that the relevant shorting operation began before the tariff news was made public. The model is highly consistent with insider trading in the forecasting market sector, marking a deep extension of the regulatory reach of the National Assembly to the decentralized derivatives market.

Specific transaction details on the Hyperliquid platform revealed the astonishing scale of profits and doubts about identity. According to data compiled by Woofun AI, the wallet involved in the case increased its holdings within a minute before Trump released the news, then made a profit of more than $150 million as all leveraged bets totaling $19 billion lost. According to Investing.com's analysis, the biggest Hyperliquid short order tracked that day involved Bitcoin and Ethereum worth around $1.1 billion. On-chain analysts have linked the mysterious wallet to former BitForex CEO Garrett King, known as the 'giant whale'. Kim denied the existence of insider trading, arguing that the deal was for a customer.

However, public blockchain records show that this giant whale, which holds more than 100,000 bitcoins, recently sold $4.23 billion worth of bitcoins to buy Ethereum, and was also the same person who placed the $735 million Bitcoin short order.

Although all Hyperliquid transactions are recorded on the public blockchain, and the wallet address is visible, the identity of the operator behind it is still hidden, and the platform clearly lacks an effective authentication mechanism, making it impossible to hand over the parties involved to US law enforcement.

The scope of the investigation quickly expanded to other platforms with similar business characteristics, highlighting the prevalence of regulatory loopholes. Comer sent a letter to Crypto.com and Aristotle Exchange, the operator of PredictIT, requesting clarification on compliance. Crypto.com allows US users to bet on political, sports, and economic events through its regulated forecasting business; PredictIt has been providing politics-related betting services since 2014. Comer emphasized that these platforms must submit their KYC (Know Your Customer) identity verification data and elaborate on how to identify suspicious transactions. Currently, Kalshi and Polymarket have submitted nearly 1000 relevant documents to support the investigation. In the letter, Comer criticized that with the popularity of online prediction platforms, bad actors use non-public information to make huge profits, while decentralized platforms such as Hyperliquid have become hotbeds for insider trading due to lack of KYC mechanisms. Their trading model is the same as the illegal acts in the forecasting market field that the Commission is investigating.

The investigation was not an isolated incident, but was based on previous predictive market regulatory precedents. In May of this year, Comer first launched an investigation into Kalshi and Polymarket. The background was that a soldier was sued in April for using inside information to profit about $400,000 from Maduro-related bets.

Additionally, Kalshi once imposed a lifetime trading ban on George Santos for betting during his State of the Union address. These cases show that speculation using undisclosed information has become a systemic risk. Comer added that with the development and popularity of online prediction platforms, regulation must keep pace with technological evolution to prevent the misuse of non-public information. This intervention in Hyperliquid marks an attempt by the US Congress to fill the regulatory gap between decentralized finance and traditional prediction markets. More anonymous trading platforms may face similar compliance reviews and legal charges in the future.