Key Takeaways
- The CFTC authorized at least three previously undisclosed investigations into potential insider trading involving Polymarket contracts, according to records obtained by WIRED through a Freedom of Information Act request.
- The probes cover markets tied to former President Joe Biden’s pardons, Iran-related events and Google’s 2025 Year in Search rankings.
- The investigations do not establish wrongdoing, but they deepen scrutiny of whether prediction markets can prevent traders from profiting from confidential or nonpublic information.
The US Commodity Futures Trading Commission quietly authorized at least three investigations into potential insider trading involving prediction market Polymarket, according to government records obtained by WIRED.
The previously undisclosed probes were approved between May and July 2026 and involve contracts linked to Joe Biden’s presidential pardons, Iran-related events and Google’s 2025 Year in Search rankings. The records were obtained through a Freedom of Information Act request.
The investigations add to mounting regulatory pressure around prediction markets, where traders can wager on everything from elections and corporate announcements to geopolitical events.
Biden Pardons and Iran Bets Draw CFTC Attention
CFTC Chairman Michael Selig approved the first investigation in early May, authorizing the enforcement division to examine potential insider trading involving Polymarket contracts related to pardons issued by Biden.
The order gave investigators authority to collect documents, issue subpoenas and take testimony. The records do not identify the specific traders or transactions being investigated.
However, the investigation followed public scrutiny of unusually successful bets on Biden’s final pardons. One trader reportedly made more than $300,000 after correctly betting on several people who would receive preemptive pardons.
Later in May, Selig authorized another investigation covering “Iran event contracts.”
That probe followed questions surrounding a group of Polymarket accounts that reportedly generated about $2.4 million from Iran-related bets while recording an unusually high success rate. The FOIA documents again do not establish that those particular trades triggered the investigation.
Google Prediction Markets Face Separate Probe
A third investigation was approved in July and focuses on possible insider trading involving contracts linked to Google’s 2025 Year in Search rankings.
An internal CFTC email reviewed by WIRED said investigators were examining “additional individuals” who may have traded using inside information. The Southern District of New York was also conducting a parallel investigation, according to the records.
The probe is separate from the CFTC’s existing case against former Google software engineer Michele Spagnuolo.
The agency charged Spagnuolo in May, alleging that he used confidential information about Google’s Year in Search results to trade at least 23 Polymarket contracts with near-perfect accuracy, generating approximately $1.2 million in profits. Spagnuolo is contesting the case.
Prediction Markets Face an Insider Trading Test
The newly revealed investigations show how insider trading has become a major regulatory challenge as prediction markets expand.
The CFTC has already demonstrated that it intends to pursue such cases. In April, it charged US Army service member Gannon Ken Van Dyke, alleging he used classified information concerning an operation to capture Nicolás Maduro to make more than $404,000 through Polymarket contracts.
Congress is scrutinizing the issue as well. The House Oversight Committee opened an investigation this year into how Polymarket and rival Kalshi identify suspicious trading and prevent users from exploiting nonpublic information.
Polymarket told WIRED that while it does not comment on individual investigations, it regularly refers matters to law enforcement and supports investigations aimed at protecting market integrity. The CFTC did not disclose the current status of the three probes.
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Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
