US senators urge CFTC to investigate Polymarket over alleged deceptive marketing

A bipartisan pair of US senators has asked the Commodity Futures Trading Commission to look into Polymarket after a Wall Street Journal report said the platform paid social media influencers to stage fake bets. For PSPs and banks watching the prediction-market space, the issue is not the headline-grabbing politics; it is the familiar mix of marketing, disclosure, and regulator attention.

1. Republican Senator John Curtis and Democratic Senator Adam Schiff sent a letter to CFTC Chair Mike Selig on Thursday, saying they were concerned Polymarket “used deceptive marketing tactics to promote gambling-style products to US audiences.” They wrote that, if the allegations are accurate, they “demand immediate scrutiny” from the CFTC.
2. The letter followed a June 20 report from The Wall Street Journal that said Polymarket paid influencers to film fake trades on websites resembling its platform, and that many creators did not disclose the payment. The Journal said it reviewed more than 1,100 videos and found that 70% featured fake bets amounting to nearly $2 million.
3. In response to that report, a Polymarket spokesperson told Cointelegraph earlier this week that the company was “conducting a comprehensive audit of active promotional content” to make sure it complied with its standards and with applicable regulatory and legal disclosure requirements. Polymarket declined to comment on the senators’ letter or on the reported CFTC investigation.
4. On Friday, The Wall Street Journal and CNBC reported that the CFTC was investigating Polymarket. CNBC, citing a person familiar with the inquiry, said the agency has an ongoing and extensive investigation into the platform, but did not say when it began. Polymarket has not commented on that reporting.
5. In the letter, Curtis and Schiff also questioned whether the CFTC is equipped to regulate prediction markets as they have become more popular, with billions of dollars in monthly volume. The senators said the CFTC has “repeatedly asserted regulatory authority” over prediction markets and event contracts, but argued that content creators portraying them as “free money” makes them look a lot closer to gambling than hedging instruments.

The regulatory angle matters here because the CFTC has already claimed authority over prediction markets, while also suing nine US states that took legal action against such platforms over alleged unlicensed sports betting via event contracts. Curtis and Schiff asked Selig to answer a list of questions by July 10, including whether the CFTC is investigating Polymarket and whether the reported advertising conduct is under review.