Key Takeaways
- The CFTC is investigating whether Polymarket breached its 2022 settlement by allowing US users onto its offshore platform.
- Investigators are reviewing geolocation controls, US advertising, and safeguards on its domestic platform.
- The 2022 settlement imposed a $1.4 million penalty and required Polymarket to end noncompliant trading.
The Commodity Futures Trading Commission (CFTC) is investigating whether Polymarket violated its 2022 settlement by failing to keep US users off its offshore prediction-market platform, Reuters reported, citing two people familiar with the matter.
The inquiry revisits compliance questions that regulators examined before closing earlier investigations without charges in 2025. It also extends to customer onboarding and protections at Polymarket’s newer US platform.
The investigation does not establish wrongdoing, and whether the company breached its settlement remains unresolved.
Regulators Examine Geographic Controls and US Advertising
The CFTC is examining whether Polymarket took sufficient steps to prevent Americans from accessing its main overseas platform, according to Reuters’ sources.
Investigators are reviewing the systems used to determine customers’ locations and the company’s advertising activities in the US. One source said the scrutiny focuses on historical controls and processes.
These questions form part of a broader investigation opened earlier this year. Media outlets reported that an inquiry was conducted in June, but Reuters’ reporting identifies additional areas under examination.
Polymarket says it has strengthened its controls, expressly prohibits the use of virtual private networks and similar tools to bypass geographic restrictions, and monitors for misconduct.
The distinction between a written prohibition and effective enforcement sits at the center of the reported inquiry. Investigators are examining whether the company’s measures adequately excluded restricted customers.
The CFTC is separately scrutinizing onboarding procedures and customer protections at Polymarket’s US platform, which began rolling out late last year.
What Did Polymarket Agree to in 2022?
The original enforcement action concerned registration requirements for event-based binary options, rather than a blanket prohibition on prediction markets.
In January 2022, the CFTC ordered Polymarket’s operator, Blockratize, to pay a $1.4 million civil penalty and wind down markets that did not comply with federal derivatives law.
The regulator found that Polymarket had operated an unregistered trading facility since approximately June 2020. Its order treated the event contracts as swaps subject to CFTC jurisdiction and recognized the company’s cooperation by reducing the penalty.
The settlement also recorded commitments to stop offering noncompliant trading access by Jan. 14, 2022, and to certify compliance and redemption arrangements by Jan. 24. Those provisions provide additional context for the renewed examination of access controls.
Questions about American participation intensified during the 2024 presidential election. The CFTC and Justice Department investigated, and FBI agents searched Chief Executive Shayne Coplan’s home that November.
In July 2025, Coplan announced that both investigations had closed and said the agencies had cleared the company. Neither agency publicly explained its decision.
US Expansion and Insider-Trading Concerns Raise the Stakes
Polymarket subsequently acquired a CFTC-licensed derivatives exchange, which became the foundation of its US operation.
That domestic business introduces a separate compliance question. Registered platforms must satisfy applicable customer-protection and market-abuse prevention requirements, while Polymarket must also maintain restrictions on access to its offshore venue.
A separate criminal case has sharpened attention on those safeguards.
In April, the Justice Department charged US Army soldier Gannon Ken Van Dyke with exploiting classified information about the operation to capture Nicolás Maduro. Prosecutors alleged that his Polymarket wagers generated approximately $409,881 in profit.
Van Dyke has pleaded not guilty. Reuters reported allegations that he used a VPN to appear outside the US; Polymarket said it referred the matter to authorities.
That case does not prove Polymarket violated its settlement. It does, however, illustrate the access-control and surveillance questions confronting prediction markets.
For now, the key issue remains whether regulators find evidence sufficient to support new enforcement action.
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Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
