CFTC Probes Polymarket Over Compliance With 2022 Settlement
Federal regulators are examining whether the prediction market platform allowed American users onto its offshore service in violation of an earlier agreement.
At a glance
- The CFTC is investigating whether Polymarket violated a 2022 settlement banning U.S. users from its offshore platform.
- Regulators are reviewing Polymarket's geolocation controls, U.S. marketing, and onboarding on its newer domestic platform.
- The company previously paid a $1.4 million penalty in 2022, while prior CFTC and DOJ probes closed in July 2025.
The Commodity Futures Trading Commission is investigating whether prediction market platform Polymarket violated the terms of a 2022 regulatory settlement designed to bar United States residents from using its offshore service, according to a person familiar with the matter.
The inquiry forms part of a broader review that the federal regulator launched earlier this year following reporting by The Wall Street Journal, which revealed that Polymarket paid online content creators to display simulated wagers and fabricated winnings on mock versions of the website. The current investigation specifically reviews whether the platform previously breached its 2022 agreement, rather than scrutinizing its present operations, according to the source, who requested anonymity because they were not cleared to discuss the matter publicly.
Regulatory Scrutiny and Onboarding Controls
Regulators are focusing on the internal tools Polymarket deployed to determine user locations, alongside the company's domestic advertising efforts. In addition, the agency is reviewing the onboarding procedures and consumer safeguards established for a dedicated U.S. service that the company introduced in late December. Reuters was first to report the renewed regulatory scrutiny.
Polymarket declined to comment on the investigation, and the CFTC did not respond to inquiries.
The regulatory action comes at a sensitive political moment, surfacing one week before the Nov. 3 midterm elections. Prediction markets have expanded rapidly over the past year, prompting growing scrutiny and concern from mental health specialists and federal lawmakers.
Past Regulatory History
This is not Polymarket's first interaction with federal market regulators. In 2022, the company agreed to block domestic users from its platform and paid a $1.4 million civil penalty to resolve an enforcement action brought by the CFTC during the Biden administration.
Federal scrutiny resurfaced in 2024 when both the CFTC and the Department of Justice launched investigations into whether the company had adhered to the 2022 agreement. Both agencies concluded and closed those inquiries in July 2025 without further action, prior to the opening of the latest review.
Source: CNBC Top News.
Questions and answers
- Why is the CFTC investigating Polymarket?
- The CFTC is examining whether Polymarket breached a 2022 settlement that required it to prevent users in the United States from accessing its offshore trading platform.
- What penalties has Polymarket faced in the past?
- In 2022, Polymarket paid a $1.4 million civil penalty to the CFTC and agreed to block U.S. users as part of an enforcement settlement.
- Does the new investigation target Polymarket's current operations?
- According to a source familiar with the inquiry, the focus is on past compliance with the 2022 settlement rather than its present operations.
