CFTC probes Polymarket’s controls and advertising activity

The Commodity Futures Trading Commission is investigating Polymarket, focusing on the blockchain-based prediction market’s internal controls and its advertising activity in the United States.

What the CFTC is looking at

The probe has two main threads: controls and marketing. Controls covers how Polymarket monitors trading on its platform and stops abuse. Marketing covers how it pitched itself to American users.

The advertising question traces back to reporting by the Wall Street Journal in June 2026. The paper reported that Polymarket paid social media influencers approximately $1.9 million to make videos showing bets placed on the platform.

The problem, per that reporting, is that many of those bets were not real. About 70% of the videos analyzed showed staged wagers rather than actual trades.

The research indicates the CFTC probe was initiated in June 2026, the same month the Journal story ran.

Congress and the insider trading thread

The revelations drew bipartisan attention on Capitol Hill. Senators Adam Schiff and John Curtis raised questions about whether the CFTC has the enforcement muscle and consumer protection authority to oversee platforms like Polymarket.

The two senators asked CFTC Chairman Selig for updates on the investigation by July 10, 2026.

Separately from the advertising review, the CFTC has authorized at least three investigations into potential insider trading tied to Polymarket event contracts. Those inquiries began in May 2026.

The markets under scrutiny include contracts on Biden pardons and on Google’s 2025 Year in Search statistics.

Charges have been filed against multiple individuals in connection with those cases, including a Google employee.

As of late October 2026, no formal charges have been brought against Polymarket itself.

Polymarket’s response

Polymarket has started internal audits of its promotional practices. The company has also stepped up compliance, standing up a dedicated investigations team of 16 people.

That review has included referring cases to regulators.

In October 2026, Polymarket’s chief marketing officer, Matthew Modabber, was terminated amid the internal review of marketing tactics.

A familiar position for Polymarket

This is not Polymarket’s first encounter with federal regulators. In 2022, the CFTC fined the company $1.4 million for offering unregistered event contracts to US persons.

The scrutiny escalated further in November 2024, when the FBI raided the residence of Polymarket’s founder in a matter tied to earlier regulatory conflicts.

The current probe also sits inside a broader fight over who gets to regulate these platforms. State and federal authorities have been jockeying over whether prediction markets look more like gambling, which states traditionally police, or like trading, which falls under federal derivatives rules.