CFTC Conducting Another Unclear Polymarket Investigation

^{Prediction market company Polymarket continues to battle bans and repeated investigations from the CFTC. (Photo: Barry King / Alamy)} 

The Commodity Futures Trading Commission (CFTC) is in the process of an ongoing investigation into prediction market platform Polymarket, according to reports from multiple media outlets.

The New York Times reported that two people familiar with the investigation say it began earlier in 2026 and has a wide scope, while Politico cited a source saying the subject of the investigation is unclear.

Polymarket Has Faced Multiple CFTC Probes

This isn’t the first time that the CFTC has investigated Polymarket, one of the world’s largest prediction markets. In 2022, the CFTC fined Polymarket $1.4 million for allowing Americans to trade on the site despite not having a license to operate in the United States.

As a part of that fine, Polymarket was explicitly banned from offering contracts in the United States. In 2024, it again looked into whether the company was violating that ban, with evidence emerging that many Americans were able to use the site via virtual private networks, or VPNs.

That investigation was still ongoing at the end of the Biden administration, and carried over early into the Trump administration in 2025. However, acting CFTC chair Caroline Pham largely shut down the investigation after being appointed in January 2025, despite the fact that attorneys in the CFTC’s enforcement division determined that it should go forward.

Since Michael Selig was sworn in as the CFTC chairman in December 2025, he has continued to take a largely hands-off approach to regulating prediction markets. However, there has been growing bipartisan scrutiny of the prediction market industry in Congresss, and Selig has said that he is directing the agency to look into issues such as insider trading on the platforms.

Polymarket has operated legally in the United States since December 2025, with full access for users who wanted to trade on the site as of spring 2026. However, the site still offers a smaller menu of options for American traders compared to the international version of the site, owing to what regulations do exist in the United States – regulations that the CFTC is seeking to clarify in the coming months.

Misleading Marketing Campaign Draws Media Scrutiny

But even before the CFTC’s ongoing investigation came to light, Polymarket has faced more public scrutiny in recent weeks. On June 20, The Wall Street Journal reported on its investigation into Polymarket’s marketing, highlighting a misleading campaign in which content creators were paid to release videos in which influencers claimed to be making winning bets on dummy websites, with nearly 70% of the over 1,100 supposed trades found to be fake.

“We are part of a rapidly growing industry and are constantly evaluating ways to improve how we’re engaging and earning the trust of our audience,” Polymarket Deputy Chief Legal Officer Olivia Chalos said in a statement in response to that investigation. “We are conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements.”

A CFTC investigation into Polymarket will further complicate the current legal issues facing prediction markets, which are engaged in a battle with gaming regulators across the country, who largely feel that the platforms are violating state-level sports betting laws by offering sports-based contracts in nearly all states. The CFTC has strongly backed Kalshi and other prediction markets in these battles, maintaining that it holds the exclusive authority to regulate the platforms at the federal level.