The Commodity Futures Trading Commission (CFTC), the federal regulator overseeing prediction markets, is conducting an "extensive investigation" into Polymarket, the Wall Street Journal reports.
Key Takeaways
- The report follows separate allegations that Polymarket used fake bets and fabricated winnings in an influencer marketing campaign.
- CFTC chair Michael Selig has never previously investigated a licensed prediction market.
- Polymarket was banned from operating in the U.S. in 2022.
The exact subject and scope of the investigation are unclear, sources told the Wall Street Journal. The WSJ previously reported that Polymarket fabricated winnings for content creators who weren't actually risking any money.
Following the initial report, two senators asked CFTC chairman Michael Selig for a probe into the prediction market platform.
“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 Polymarket spokesperson told CNBC in a statement.
The reported investigation comes amid broader scrutiny of prediction platforms, which have also been subject to scrutiny over a perceived disregard for state gaming officials, instances of insider trading, and their market offerings.
Several publications shared that spokespeople for the CFTC and Polymarket both declined to provide additional comments.
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More scrutiny
Polymarket is growing familiar with legal run-ins with the CFTC.
The platform - which reached $1 billion in annualized trading volume six weeks after it removed its waitlist in mid-May - was banned from operating in the U.S. in January 2022. The decision was part of a settlement after Polymarket was found to have operated an unregistered derivatives trading platform.
The platform was allowed to return in September 2025 after it acquired CFTC-licensed derivatives exchange and clearinghouse QCX. Polymarket US relaunched in December 2025 in a limited capacity before its full launch in May.
The CFTC has generally taken a supportive stance toward federally regulated prediction markets. The CFTC has filed several lawsuits against state officials who have tried to impede or regulate their progress, most recently targeting Kentucky’s governor, attorney general, and gaming regulatory body for approving an excise tax on transactions and approving a ban on sports event contracts.
If confirmed, the investigation would be the first known regulatory probe of a licensed prediction market operator under Selig's leadership.
