CFTC expands probe into Polymarket over staged trades and fake wins

Polymarket is back in the regulatory crosshairs, and this time the scrutiny goes well beyond its usual territory.

The Commodity Futures Trading Commission is conducting a broad investigation into the blockchain-based prediction market platform, covering staged trades and fabricated winning bets, Bloomberg reported on June 26. CNBC separately confirmed the expanded scope of the probe on the same day. The investigation follows a Wall Street Journal exposé published June 23 that revealed Polymarket had contracted content creators, many of them college students, to produce misleading videos of staged trades on sites designed to mimic the platform.

From influencer scheme to federal investigation

This isn’t Polymarket’s first brush with the CFTC. The platform settled with the agency back in 2022, paying a $1.4 million penalty for offering unregistered event-based binary options.

The WSJ report detailed a coordinated effort in which Polymarket allegedly hired creators to film videos showing themselves placing trades and celebrating wins on what appeared to be the platform. The videos were designed to look organic, the kind of content that might go viral on TikTok or Instagram and draw new users into the ecosystem.

A bipartisan Senate letter dated June 25 called on the CFTC to take action regarding Polymarket’s marketing practices, adding congressional pressure to the regulatory momentum. The letter reportedly urged the commission to examine potential breaches of existing regulations.

A complicated regulatory history

After the 2022 settlement, the platform blocked US-based users from accessing its markets. Federal agencies, including the Department of Justice, conducted further inquiries into the platform. Those probes concluded without charges in July 2025, which Polymarket likely viewed as a green light to begin exploring US compliance pathways again.

The platform increased its profile significantly, forging ties with notable figures including Donald Trump Jr. Polymarket’s markets on the 2024 US presidential election became widely cited data points, giving Polymarket a veneer of legitimacy that few crypto-native platforms had achieved.

Both the CFTC and Polymarket have declined to comment publicly on the investigation.

What this means for prediction markets and DeFi

The prediction market sector has been one of the few corners of DeFi that seemed to be gaining regulatory acceptance. Kalshi, a CFTC-regulated competitor, won a court battle in 2024 to offer political event contracts.

If the CFTC pursues action based on off-chain marketing conduct, specifically the creation and distribution of misleading social media content, it establishes that decentralized platforms can face regulatory consequences not just for what happens on-chain, but for how they promote themselves off-chain.

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