bitcoin ·
CFTC Again Probes Polymarket Over Whether It Let Americans Trade
The Commodity Futures Trading Commission is currently examining whether Polymarket violated a settlement reached in 2022 by permitting American users access to its international exchange, according to reporting from Reuters released earlier today.
The agency is revisiting an investigation it previously closed in 2025 without bringing forth any formal charges. For a platform that has attempted to integrate prediction markets within the bounds of US law, this question touches upon its fundamental nature. Polymarket entered into a settlement with the CFTC in January 2022, incurring a financial penalty of $1.4 million for offering binary options based on events without proper registration. As part of that agreement, the firm committed to preventing individuals from the United States from using its foreign exchange. Although the company implemented geofencing mechanisms, regulators and critics noted that traders could still gain entry to the site via VPNs. The platform has also attracted crypto enthusiasts, adding the capability to accept bitcoin deposits in October 2025 as part of a wider strategy to fund accounts using digital assets.
Investigators are reportedly scrutinizing three specific aspects: the sufficiency of Polymarket’s geographical restrictions, its marketing activities within the United States, and the processes for customer onboarding and protection on its US platform, which was introduced late last year. The company maintains its headquarters in New York, while its offshore exchange operates under an entity registered in Panama. It should be noted that an inquiry constitutes an investigation, not a definitive finding, and numerous such probes conclude without any enforcement action.
Polymarket is facing an increasing level of regulatory examination. This inquiry is part of a broader movement; in June, the Wall Street Journal reported that Polymarket compensated certain individuals to create videos depicting fabricated winning wagers, prompting senators Adam Schiff and John Curtis to call for the agency to initiate a probe. Bloomberg has indicated that investigators were reviewing the company's presence on social media. CFTC Chairman Michael Selig has characterized prediction markets as instruments for information discovery and hedging, asserting that federal bodies, rather than state governments, ought to oversee them. Furthermore, Enforcement director David Miller has promised rigorous oversight of this sector.
Enforcement scrutiny has a concrete example in the case of Gannon Ken Van Dyke, a US soldier who was charged in April with earning $400,000 from insider bets placed on the foreign platform. The indictment details that he utilized a VPN and an "exit mode" that appeared to be situated in another nation. Polymarket has stated that it referred this matter to the appropriate authorities, and Van Dyke has refuted the allegations.
The significance of the platform is amplified by its scale. Intercontinental Exchange, which owns the NYSE, committed to a substantial investment of approximately $2 billion in October 2025, and Bloomberg cited founder Shayne Coplan, who is 27, as one of the youngest self-made billionaires. The larger the size of the exchange, the more critical its geographical barriers become. Earlier this year, a small cohort of traders managed to exploit Polymarket’s five-minute Bitcoin up/down contract by influencing Binance’s price in the final moments preceding each closing period, according to a study. In these manipulated cycles, just 821 wallets, representing roughly one out of every 300 traders, gained $8.2 million, with 93% of the resulting losses being sustained by retail bettors. The study's authors determined that no manipulation occurred within the fifteen-minute contract, because a longer timeframe lessens the impact of a fixed push, a lesson that is currently relevant as Nasdaq and Cboe have submitted filings to list comparable binary contracts on equity indices.
Earlier coverage
Reported by bitcoinmagazine.com.
