Polymarket Faces Broad CFTC Probe Amid Fake Bets Allegations

Crypto prediction market platform Polymarket is facing an extensive investigation by the Commodity Futures Trading Commission (CFTC). This comes amid allegations that the platform paid online creators to create fake bets and winnings targeting U.S. users.

CFTC Conducting Extensive Probe Into Polymarket

According to a Bloomberg report, the Commission is conducting an extensive investigation into the prediction market platform, citing a person familiar with the matter. This marks the latest scrutiny for the platform, even as state regulators crack down on prediction market platforms.

The CFTC is reportedly investigating Polymarket’s social media activity as part of the probe. People familiar with the matter also said that the investigation began earlier this year, marking the third CFTC probe into the prediction market platform.

In 2022, the Commission investigated the platform for operating an illegal and unregistered financial exchange. This led to a $1.4 million fine and a ban on offering its prediction markets to U.S. users. Meanwhile, between 2024 and 2025, the regulator, alongside the Department of Justice (DOJ), investigated whether the platform was violating the 2022 ban, and both agencies closed the investigation last year without charges.

Now, the latest investigation comes amid allegations that Polymarket paid online influencers to create fake bets and winnings that targeted U.S. users. The Wall Street Journal, which conducted the investigation, reported that some of these influencers had created this content without disclosing their partnership with the prediction market platform.

Following the WSJ report, U.S. lawmakers called on the CFTC to investigate Polymarket over the deceptive marketing. These lawmakers, Senators Adam Schiff and John Curtis, asked the CFTC to provide a written response no later than July 10, stating whether it is investigating the platform.

The Platform Is Also Facing A New Lawsuit

Polymarket’s founder, Shayne Coplan, and its Chief Marketing Officer (CMO), Matthew Modabber, are also facing a lawsuit over the WSJ report. The lawsuit claims that Coplan and Modabber engaged in a “sweeping deceptive market campaign” to get young Americans to use the platform.

The lawsuit filed on behalf of the National Association of Consumer Advocates also accuses the top crypto prediction platform of unfairly targeting college-aged individuals and students into gambling real money while obscuring how likely bettors are to lose.

The complaint specifically names Coplan for holding the “ultimate decision-making authority” over the company’s operations and marketing. Meanwhile, Modabber is personally named for overseeing the advertising practices, which are at the center of the WSJ report.