Polymarket CFTC probe revisits 2022 settlement a week before the midterms

Polymarket's regulatory past is back on the table. The Polymarket CFTC probe, reported by Reuters on Tuesday, looks at whether the company broke a 2022 settlement in which it promised to keep U.S. users off its main offshore platform.

What happened

The Commodity Futures Trading Commission is looking at how Polymarket determines a user's location and at its marketing in the United States, two people familiar with the matter told Reuters. It is also scrutinizing the onboarding and customer protections of Polymarket's U.S. platform, which began rolling out late last year. The inquiry is part of a broader investigation the agency opened earlier this year.

CNBC, citing one person, said the latest focus is on whether Polymarket broke the settlement in the past and is unrelated to its present operations. It linked the wider probe to a Wall Street Journal report that the company paid creators to post videos of simulated trades on dummy versions of its site. Spokespeople for the CFTC and Polymarket declined to comment, and investigations do not necessarily mean wrongdoing.

Under the 2022 deal, Polymarket paid a $1.4 million civil penalty. The CFTC and the Justice Department opened probes into its compliance in 2024, and Chief Executive Shayne Coplan said in July 2025 that both had been closed. A week later, Polymarket announced the purchase of a CFTC-licensed derivatives exchange that now houses its U.S. business.

The earlier episode was dramatic. The FBI searched Coplan's New York home in November 2024 as part of the Justice Department investigation, Reuters recalled. The company is headquartered in New York, with its offshore arm registered in Panama, and Donald Trump Jr. is among its investors. In August, Bautista told Reuters that U.S. users getting around its restrictions was not "a really prevalent issue."

Why it matters

The timing is awkward, with midterm elections on Nov. 3. Polymarket's head of investigations, Shana Bautista, told NPR that her 16-person team has investigated "dozens" of election-related bets, and a person familiar said at least two cases were referred to the CFTC. "If you decide that you are smarter and can do it, we will find you," she said.

The Polymarket CFTC probe also lands as the company was reported to be in $21 billion valuation talks, and as the agency steps up its own market surveillance. The same regulator is defending the industry elsewhere: CoinDesk reported this week that it sued Utah to protect Kalshi's ability to offer contracts in the state.

What's next

Polymarket says it prohibits VPNs and similar tools to dodge its geographic restrictions and runs controls to keep restricted users out. Reuters said the new details raise questions about why the earlier probes were closed. No timeline has been given for the Polymarket CFTC probe. Reuters' full report is available via CNA.