A top Wall Street regulator is investigating the prediction market giant Polymarket, according to a person familiar with the matter.
The Commodity Futures Trading Commission — the chief watchdog for prediction markets — is conducting an "extensive investigation" into the high-flying company, said the person, who was granted anonymity because the probe is confidential. The person said the subject of the investigation was not immediately clear.
It comes amid growing concern in Washington about the burgeoning prediction markets, which offer a range of bets on U.S. elections, sports and pop culture events. Wagers tied to the Iran war that are offered on Polymarket's offshore market for months have drawn the ire of lawmakers on both sides of the aisle worried about the threat of insider trading. And more recently, Polymarket's marketing strategies have drawn attention.
Polymarket didn't comment on any investigation, but a top official said the company is always looking for ways to better interact with users.
"We are part of a rapidly growing industry and are constantly evaluating ways to improve how we're engaging and earning the trust of our audience," Polymarket Deputy Chief Legal Officer Olivia Chalos said in a statement. "As part of that commitment, we are conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements."
A CFTC spokesperson said the agency's policy is to neither confirm nor deny investigations.
The probe's existence was earlier reported Friday by The Wall Street Journal, which recently published an in-depth investigation into Polymarket's use of "deceptive videos" on social media. POLITICO also reported earlier this month that a top Polymarket executive used his personal PayPal account to send money to prominent content creators.
Sens. John Curtis (R-Utah) and Adam Schiff (D-Calif.) pointed to the Journal's reporting while calling on the CFTC to dial up its scrutiny of Polymarket in a letter Thursday.
Led by Chair Michael Selig, the CFTC has embraced the prediction markets since President Donald Trump's inauguration last year — proposing new rules cheered by the industry and filing a series of lawsuits against prediction market opponents. But the Polymarket probe suggests there are limits to how far the agency's support for the industry will go.
It's not the first investigation into Polymarket. In 2022, the company agreed to pay $1.4 million to settle CFTC charges alleging that it was illegally operating a financial exchange in the U.S. And last year, the CFTC and the Justice Department dropped a pair of investigations into Polymarket that had, at one point, prompted a raid on the New York home of the company's CEO, Shayne Coplan.
Coplan, 28, founded Polymarket six years ago. Like most prediction markets, the company existed outside the spotlight for years. But the 2024 election catapulted the markets into the spotlight, as U.S. users were able to finally begin wagering on politics in a major way. The industry, in turn, almost immediately began beefing up its presence in Washington.
Last year, Polymarket added Donald Trump Jr. as an adviser while the venture capital firm 1789 Capital, where Trump Jr. is a partner, invested in the company. Trump Jr. is also an adviser to Polymarket's chief competitor, Kalshi.
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