Polymarket Faces CFTC Probe as WSJ Reports $10 Million Fraud Attempt and 80% Transaction Rejection Rate

Polymarket is under scrutiny from the Commodity Futures Trading Commission while its compliance practices are being questioned after a Wall Street Journal report said the company flagged a $10 million attempted fraud scheme and was rejecting 80% of transactions as fraudulent. For PSPs and high-risk merchants, the useful part is simple: growth is easy to talk about, but fraud controls, record retention, and regulator handling are where the bill usually comes due.

1. The Wall Street Journal reported on Sunday, Sept. 20, 2026, that Polymarket has struggled with compliance failures, legal challenges and software issues while trying to expand its prediction market business.
2. According to the report, a company processing debit-card transactions for Polymarket’s U.S. betting platform uncovered a $10 million attempted fraud scheme. The same report said the company was rejecting 80% of transactions as fraudulent, far above the industry standard of 1%.
3. The Commodity Futures Trading Commission is investigating Polymarket, and employees have been told to retain records related to the fraud attack and other matters, sources familiar with the matter told WSJ. That is the part compliance teams usually notice first: once records are being preserved, the regulator has already entered the room.
4. WSJ said Polymarket’s compliance team raised the issue with CEO Shayne Coplan and were shocked by his response: keep growing and pay a fine if regulators ever discover the truth. Current and former employees told the paper that the response fit a broader “growth at all costs” approach.
5. Former financial regulators interviewed by WSJ said the level of attempted fraud and Polymarket’s response was unusual for the commodities and gambling industries. Former CFTC enforcement lawyer Joe Konizeski said, “In the regulated space, this kind of thing does not happen.”

Polymarket’s spokesman said the platform is committed to maintaining accurate, fair and transparent markets and cooperating with regulators and law enforcement. The spokesman also said its market integrity framework includes processes to detect, review and respond to suspicious activity. Separately, a source familiar with the company’s operations told WSJ that Polymarket has been improving its compliance protocols and product testing, and that it has hired Shauna Batista, a former FBI agent, to head its investigation team.

The CFTC probe is not the only headache here. WSJ said New York City is investigating Polymarket’s advertising practices, and more than a dozen states are probing whether Polymarket and rivals like Kalshi are operating properly. For anyone in payments, the signal is familiar: once a business starts drawing this much attention from regulators, fraud controls stop being an internal metric and become part of the licensing story.