The CFTC is investigating whether Polymarket violated its January 2022 enforcement settlement by allowing US users onto its offshore platform. Polymarket paid a $1.4 million penalty in 2022 for offering event-based binary options without registration and agreed to block American traders. The agency closed a prior inquiry in 2025 without filing charges but has now reopened the probe.
Investigators are examining three areas: the effectiveness of Polymarket's geofencing tools, the company's US-based advertising, and operations on its domestic platform launched late last year. Critics have noted that traders have circumvented location controls using VPNs. Polymarket added bitcoin deposits in October 2025 to expand account funding options.
The probe follows other scrutiny. In June, senators Adam Schiff and John Curtis urged the CFTC to investigate after the Wall Street Journal reported that Polymarket paid individuals to produce videos of fictitious winning bets. Bloomberg reported that investigators examined the company's social media activity.
In April, federal prosecutors charged US soldier Gannon Ken Van Dyke with making $400,000 from insider bets on the platform using a VPN. Van Dyke denied the charges, and Polymarket said it referred the matter to authorities.
Intercontinental Exchange, parent of the NYSE, agreed in October 2025 to invest roughly $2 billion in Polymarket. The company is headquartered in New York and operates its offshore exchange through a Panama-registered entity.
A separate study found that traders exploited Polymarket's five-minute Bitcoin up/down contract by pushing Binance's price in final seconds before close. Just 821 wallets captured $8.2 million across pushed cycles, with 93% of losses hitting retail bettors. The authors found no manipulation in the fifteen-minute contract.