The Commodity Futures Trading Commission (CFTC) has opened a wide-ranging investigation into Polymarket's business activities, including its social media operations, according to Bloomberg reports. The inquiry extends beyond marketing practices into other aspects of the company's operations, following reports that Polymarket used fake trading videos and undisclosed influencer promotions to attract users. According to CNBC, citing a person familiar with the matter, the investigation remains active, although the source did not disclose when it began. Both the CFTC and Polymarket have yet to issue official statements regarding the matter.
The investigation follows a Wall Street Journal investigation published last week that alleged Polymarket hired dozens of mostly college-aged content creators to post fake trading videos designed to attract new users. According to the newspaper, it reviewed 1,105 videos posted between December 2025 and mid-May and found that about 70% contained simulated trades rather than real market activity. The report said the campaign displayed roughly $1.9 million in fake bets, including nearly $900,000 in fabricated winnings that would instead have resulted in losses if placed on the live platform. Further, it alleged that creators were paid about $2,000 to $3,000 per month through marketing contractor Virality and were instructed not to disclose the sponsorships. Analytics firm Tubular estimated the videos generated more than 140 million views across TikTok, YouTube, and Instagram.
U.S. Senators Adam Schiff and John Curtis have formally requested the CFTC investigate Polymarket over alleged deceptive advertising practices. According to their letter, the senators asked CFTC Chair Michael Selig last week to confirm whether the agency had opened an investigation into Polymarket's advertising practices and to explain how it has prevented the platform from attracting U.S. users since the 2022 settlement. The senators also questioned whether the agency has sufficient oversight tools to supervise prediction markets and requested details on advertising standards, influencer disclosure rules, consumer safeguards and age verification requirements.
Responding to the allegations, Polymarket told CNBC it is conducting a comprehensive audit of its active promotional content to ensure it complies with company standards as well as regulatory and legal disclosure requirements. The company has barred Americans from its main platform since reaching a settlement with the regulator in 2022, although some users continue accessing the service through virtual private networks. The company has also been working to restore access to the U.S. market, as crypto.news previously covered, with Polymarket launching a CFTC-regulated U.S. exchange in December. The current inquiry would be the first major investigation into an event contract platform under CFTC Chair Michael Selig's tenure, whose tenure has generally been viewed as supportive of prediction markets.
The concerns arrive as the CFTC continues defending its position that prediction markets fall under its exclusive jurisdiction. Earlier this week, the regulator sued Kentucky after state authorities moved against prediction market operators, including Polymarket and Kalshi, arguing that federal law gives the agency sole oversight of those products. The investigation comes as Polymarket works to restore access to the U.S. market while facing renewed regulatory scrutiny. Research shows that 45% of adolescent boys who gamble report seeing gambling-related content online, with a staggering 59% stating the content was pushed into their algorithmic feeds without them ever proactively searching for it. According to a 2024 study cited by lawmakers, individuals who begin gambling before the age of 18 are 50% more likely to develop a severe gambling addiction later in life, while roughly one in three boys between ages 11 and 17 have engaged in some form of gambling in the past year.
