NEW YORK, Oct 27 : A US regulator is investigating whether prediction market operator Polymarket violated a 2022 enforcement deal in which it promised to ban US users from its main overseas platform, reviving an inquiry the agency shuttered last year without bringing charges, said two people familiar with the matter.
The Commodity Futures Trading Commission is probing whether Polymarket took sufficient steps to keep US users off the platform as part of a broader investigation it opened into the company earlier this year, the people said. One of the people said the scrutiny is focused on Polymarket's past controls and processes.
The agency is examining Polymarket's controls for determining where customers are located, as well as its advertising activities in the United States, as part of that inquiry, the people said.
Polymarket is based in New York and has an offshore entity registered in Panama.
The CFTC is also scrutinizing Polymarket's US platform, which the company began rolling out late last year, including its customer onboarding processes and customer protections, said the people, who spoke on the condition of anonymity to discuss confidential enforcement issues.
Reuters is reporting these elements of the probe for the first time. The Wall Street Journal, Bloomberg News and other media first reported in June that the CFTC was broadly probing Polymarket, but provided few details. Bloomberg added that the CFTC was looking into social media activity tied to the company.
Spokespeople for the CFTC and Polymarket declined to comment. Probes are not necessarily an indication of wrongdoing and many do not result in enforcement action.
The new details, nevertheless, raise fresh questions over why the CFTC and Justice Department last year closed similar probes into whether Polymarket had violated the 2022 settlement, which resolved CFTC allegations at the time that Polymarket had been operating in the US unlawfully since its launch in 2020.
Neither agency has commented on the decision to close the probes and a Justice Department spokesperson declined to comment for this story.
Prediction markets allow traders to bet on real-world events, including sports, government policy announcements and elections. Aided by supportive policies under President Donald Trump's second administration, the industry has surged over the past two years. Trump's son, Donald Trump Jr, is a Polymarket investor.
As the platforms have grown, they have drawn scrutiny from Democratic lawmakers and advocacy groups worried the platforms are creating new avenues for insider trading, while recent political upsets, including in Brazil this week, have raised questions about their accuracy.
Polymarket has said it has revamped controls. The firm says it expressly prohibits the use of virtual private networks (VPNs) or similar tools to circumvent its geographic restrictions, and has extensive controls to monitor for misconduct and to prevent restricted users from accessing its offshore platform.
Speaking to Reuters in August, Shana Bautista, Polymarket's global head of investigations and intelligence, said US users circumventing its restrictions was not "a really prevalent issue."
BIDEN ADMINISTRATION AGENCIES OPENED PROBE IN 2024
Under the 2022 settlement negotiated by the CFTC's former Biden-era leadership, Polymarket agreed to stop offering its market to US users. But as 2024 US election bets on the platform grew, political pundits and social media users questioned whether Americans were circumventing Polymarket's restrictions.
Months before the election, the CFTC opened a probe into whether Polymarket was complying with the deal, Reuters and other media reported at the time. The Justice Department opened a related investigation, with the FBI searching Polymarket CEO Shayne Coplan's New York home in November 2024.
Two months later, the Trump administration took office and appointed new leaders to both agencies. On July 15, 2025, Coplan said in an X post that the CFTC and Justice Department had closed their probes and cleared the company of any wrongdoing.
A week later, Polymarket said it had bought a CFTC-licensed derivatives exchange, which became the platform for its US operation. CFTC-registered platforms must comply with certain customer protection and market abuse prevention requirements.
While CFTC data shows the agency's overall enforcement activity has slumped during Trump's second presidency, its enforcement director David Miller said during his first month on the job in March that he would aggressively police prediction markets.
In April, the agency and Justice Department charged a US soldier, alleging he made $400,000 from insider bets on Polymarket's offshore platform, sparking fresh questions about its controls.
According to the indictment, Gannon Ken Van Dyke, who has pleaded not guilty, accessed the platform using a VPN and "exit mode," which geolocated to a foreign country. Polymarket said at the time that it had referred the matter to the authorities.