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The Commodity Futures Trading Commission is reviewing whether Polymarket honored the U.S. access restrictions attached to its 2022 settlement, Crypto.news reported, citing Reuters. That agreement required a $1.4 million civil penalty and cut off American users from the company’s noncompliant markets.
Reuters reported on Oct. 27, relying on two people familiar with the matter, that the examination covers the offshore venue’s location controls and its U.S. advertising, as well as onboarding and customer protections on the company’s separate domestic exchange. Cnbc, which confirmed the probe through a person familiar, reported that it concerns whether Polymarket previously breached the settlement and is unrelated to the platform’s current operations. Cnbc also noted that Reuters was first to report the inquiry.
Also readCFTC monitors prediction markets for manipulation before midterms
Key facts
- The CFTC’s Jan. 3, 2022, order identified Blockratize, Inc., doing business as Polymarket, and found it offered event-based binary options without registration as a swap execution facility or designation as a contract market.
- The agency said the company ran the unregistered facility since roughly June 2020 and offered more than 900 event markets covering crypto prices, public health data and election results, with trading settled through blockchain-based smart contracts.
- The order set a Jan. 14, 2022, deadline to halt noncompliant trading and make funds available for full redemption, with written certification due Jan. 24.
- According to Cnbc, the current inquiry began after a Wall Street Journal exposé said Polymarket paid content creators to post videos showing simulated trades and fabricated wins on dummy versions of its site.
- Polymarket completed its $112 million purchase of QCEX, a CFTC-licensed derivatives exchange and clearinghouse in Boca Raton, Florida, in July 2025, shortly after earlier federal probes ended.
How the two accounts of the review differ
The outlets agree on the substance of the examination but describe its context somewhat differently. Cnbc ties the broader probe’s origin directly to the Journal’s reporting on promotional videos and says its source could not give a start date. Reuters frames the settlement review as part of an investigation opened earlier this year and quotes a source describing scrutiny of past controls and processes. Neither outlet reports an announced finding that Polymarket violated the agreement.
Polymarket’s global head of investigations and intelligence, Shana Bautista, told Reuters that the company’s controls could block the vast majority of Americans from the offshore service. She described systems combining machine learning, blockchain analytics, trade surveillance, open-source research and outside services, and said of users trying to evade location limits, “I do not see it being a really prevalent issue.” The company said its surveillance work had produced more than 100 referrals to law enforcement; that assessment is the company’s own. Polymarket and the CFTC declined to comment to Reuters, and Polymarket declined to comment to Cnbc.
Also readCFTC Launches Innovation Committee With Crypto, AI, and Prediction Markets on Agenda
Why it matters
The review lands roughly a week before the Nov. 3 midterm elections, a period in which Cnbc reports growing concern among lawmakers and mental health experts about prediction markets’ rapid growth. It also tests how aggressively the agency polices the access restrictions that let Polymarket return to the U.S. market through a licensed domestic venue while keeping its global platform offshore. The earlier CFTC and Justice Department inquiries, opened in 2024 and closed in July 2025 without charges, were never publicly explained, and the FBI searched CEO Shayne Coplan’s home in November 2024.
Separately, the CFTC’s business and marketing review has looked at social media activity, and New York City Council Speaker Julie Menin opened a marketing inquiry in August seeking information from Polymarket, Kalshi, Coinbase and Gemini Titan. Senators Adam Schiff and John Curtis had asked CFTC Chair Michael Selig how the agency oversaw advertising, influencer disclosures, age verification and consumer safeguards.
What to watch
The concrete next markers are the Nov. 3 midterm elections and whether the CFTC or Justice Department say anything publicly about the basis for closing the 2024 probes or about this review. A formal finding, if one comes, would be the first public determination on whether the 2022 order’s access terms were met.
Sources: crypto.news, Cnbc
