The U.S. CFTC Launches Extensive Investigation into Polymarket Over Fake Trading Marketing and Improper Customer Acquisition

According to Bloomberg, the U.S. Commodity Futures Trading Commission (CFTC) is conducting a broad investigation into the prediction market platform Polymarket, with the probe now extending to its social media activities and other business operations.

As previously reported by media outlets, Polymarket had hired dozens of social media creators—mostly college-aged—to produce videos of fake trades in order to attract users, which drew regulatory attention and prompted the investigation.

Notably, Polymarket has a long-standing history of conflict with regulators. Although the company reached a settlement with the CFTC in 2022 and technically banned U.S. users from the main platform, some users still bypass the ban using VPNs.

Meanwhile, Polymarket has been actively advancing its compliance efforts, attempting to restart its business in the U.S. market, engaging proactively with the CFTC, and seeking to lift the ban on U.S. users and relaunch domestic trading operations.

However, last Thursday, two senators sent a letter to the CFTC requesting an investigation into Polymarket’s advertising practices and asking whether the agency had taken any measures since its 2022 action to prevent Polymarket from improperly soliciting and attracting U.S. users.

Taken together, these developments indicate that while Polymarket seeks access to the U.S. market, it is facing dual scrutiny from regulators and lawmakers, and the platform’s future compliance path in the U.S. market remains highly uncertain.

#CFTC #Polymarket