CFTC reopens probe into whether Polymarket broke its 2022 US-user settlement

The Commodity Futures Trading Commission is investigating whether prediction market platform Polymarket violated a 2022 settlement that required it to keep US users off its offshore market, a person familiar with the matter told CNBC Tuesday. The inquiry covers the controls Polymarket used to detect where customers were located, its advertising in the United States, and the onboarding and customer protection measures on the US platform the company launched in late December, the person said.

Unchained reported that Reuters attributed the details to two people familiar with the matter, and that the settlement questions sit inside a wider CFTC investigation the agency opened earlier this year. One of those sources said investigators are focused on Polymarket's past controls and processes. CNBC's source likewise said the latest inquiry is unrelated to how the platform runs today.

The enforcement history is not in dispute. In January 2022, Polymarket settled CFTC charges that it had offered event-based binary options without registering as an exchange, paying a $1.4 million civil penalty and agreeing to wind down markets that did not comply with the Commodity Exchange Act, the report noted. As part of that deal the company also stopped serving US users, and the agency is now asking whether Polymarket took sufficient steps to honor those location restrictions.

The CFTC first examined compliance with the settlement in the run-up to the 2024 election, and the Justice Department opened a related investigation. FBI agents searched the New York home of Polymarket chief executive Shayne Coplan in November 2024. Both agencies ended those probes in July 2025 without bringing charges.

A few weeks after those closures, Polymarket bought a CFTC-licensed derivatives exchange and later used it to run its US business. The company has said it rebuilt its controls, prohibits VPNs and similar workarounds to its geographic restrictions, and monitors for misconduct. Shana Bautista, Polymarket's global head of investigations and intelligence, told Reuters in August that US users circumventing those restrictions was not "a really prevalent issue."

The renewed probe also arrives with a pending case against a user. In April, the CFTC and the Justice Department charged a US soldier, Gannon Ken Van Dyke, with making $400,000 trading on inside information on Polymarket's offshore site, with the indictment saying he reached the site through a VPN. He has pleaded not guilty, and Polymarket has said it referred the case to authorities.

The settlement angle is new; the wider case is not. Several outlets covered the broader CFTC probe in June, after bipartisan senators publicly called for an investigation of Polymarket over staged promotions, and Reuters was first to report the settlement questions now under review. CNBC reported that the current examination grew out of that work, which began after a Wall Street Journal exposé said Polymarket had paid content creators to post videos showing simulated trades and fabricated wins on dummy versions of its website.

Regulatory attention has intensified as prediction markets have grown. The inquiry comes one week before the Nov. 3 midterm elections, amid escalating concern among lawmakers and mental health experts about the sector's expansion over the past year. An investigation does not necessarily indicate wrongdoing, and many probes end without enforcement action.

Recent company moves add to the timing. Polymarket recently pushed out chief marketing officer Matthew Modabber, a longtime friend of Coplan's, according to a separate report cited by Unchained, and the company took Ohio to federal court earlier this month over new CFTC rules. Spokespeople for the CFTC, Polymarket and the Justice Department declined to comment to Reuters, and none had issued a public statement by publication time.

The person familiar with the inquiry did not give a start date for the investigation.