The Commodity Futures Trading Commission is conducting an extensive, ongoing investigation into prediction market platform Polymarket, according to a person familiar with the inquiry. Neither the CFTC nor Polymarket commented on the reported probe, and it was not disclosed when the investigation began. The inquiry surfaced days after reporting that Polymarket had run a marketing campaign in which social media creators appeared to post winning trades that were not placed with real money.
Reports on the campaign said creators were paid to present simulated trades on replica versions of Polymarket’s site as if they were genuine wagers, with some videos portraying large gains on event-based bets tied to politics and economic decisions. The same reporting said many posts did not clearly disclose sponsorships and that contractors also used commenters to make the content appear organic. After questions were raised, Polymarket said it was reviewing its promotional materials and auditing active content for compliance with company standards and applicable legal and regulatory disclosure requirements.
The investigation marks a notable shift in Polymarket’s regulatory trajectory in the United States. The company had been barred from allowing U.S. users in 2022 over registration issues, but prior investigations by the CFTC and the Justice Department were dropped last July without charges. Polymarket later launched a CFTC-regulated U.S. exchange in December, restoring domestic access, and removed its waitlist about six weeks ago. Under Chairman Michael Selig, the CFTC has taken an assertive stance in support of prediction markets, making the reported Polymarket probe a high-profile test of oversight in the sector.
Supporters of prediction markets have argued that the sector remains in a developing regulatory environment, including on related ethics and disclosure questions, while presenting event contracts as a novel financial product distinct from traditional investments. Critics, however, contend that the allegations surrounding Polymarket’s influencer campaign undermine the transparency that prediction markets often cite as a core advantage. They argue that if promotional content exaggerates profits or masks simulated activity as real trading, it can blur the line between market information, advertising and speculation.
The scrutiny arrives as competition in prediction markets intensifies and trust becomes increasingly central to the industry’s growth. Polymarket has built its profile around allowing users to wager on the outcome of real-world events through blockchain-based markets, a model backers say offers visibility into public expectations. But the latest allegations have raised broader questions about whether the sector’s rapid expansion, especially through viral social media promotion, is outpacing the safeguards needed to maintain confidence among users and regulators.