SEC Clears Nasdaq BTC Options; House Probes Prediction Markets

The Securities and Exchange Commission on Friday granted accelerated approval for Nasdaq’s proposal to list cash-settled Bitcoin index options on the Philadelphia Stock Exchange under the ticker QBTC. The commission published its order on its website.

The contracts are European-style options tied to the Nasdaq Bitcoin Index, a benchmark that tracks one one-hundredth of the CME CF Bitcoin Real Time Index and refreshes with exchange data every 200 milliseconds. The options will be cash-settled, so holders receive the difference between the Bitcoin spot price and the strike price at expiration rather than taking delivery of Bitcoin. Trading on Phlx will use a minimum price increment of $0.01 and a position limit of 24,000 contracts per side, which the SEC said is roughly 0.12% of Bitcoin’s outstanding supply.

House Oversight Committee Chair James Comer opened a formal investigation into trading on prediction market platforms amid concerns that users with access to nonpublic government information may have profited on event-driven markets. Comer sent letters to the chief executives of Kalshi and Polymarket requesting documents and communications on how the platforms detect suspicious activity, vet accounts, share data and handle internal investigations.

The inquiry cites several instances of unusually accurate trades placed shortly before major political and military events. One case referenced by the committee involves a U.S. Army soldier accused of using classified information to generate hundreds of thousands of dollars in profits through prediction market trades.

Separately, Polymarket confirmed a security incident that affected part of its infrastructure. The company posted that “contracts and core infrastructure were unaffected,” and the product lead and other employees wrote that “user funds and market resolution are safe.” Polymarket’s vice president of engineering described the issue as limited to a six-year-old private key used for internal top-up operations and said all permissions tied to that key have been revoked.

A blockchain investigator flagged activity consistent with a compromise of a Polymarket-linked UMA Conditional Tokens Framework adapter on the Polygon network. On-chain records show more than 100 small transfers into an alleged attacker wallet and the movement of Polygon (POL) tokens in repeated 5,000-POL increments. A blockchain visualization service reported the extractor removing roughly 5,000 POL tokens approximately every 30 seconds and accumulating about $600,000 at the time of its post. Earlier on-chain analysis indicated at least $520,000 was drained.

The UMA adapter serves as an oracle contract used to resolve Polymarket prediction markets through UMA’s Optimistic Oracle. Polymarket stated that the market resolution process and contract logic were not compromised and that user-facing markets remained intact. Polymarket handles multiple billions of dollars in monthly trading volume.

The SEC approval, the congressional letters and the platform security incident were announced in close succession, reflecting concurrent regulatory and oversight activity related to crypto-derived financial products and event-driven trading platforms.