The Commodity Futures Trading Commission reportedly launched an “extensive investigation” into prediction market giant Polymarket on Friday, amid mounting bipartisan pressure and a separate consumer protection lawsuit over allegedly deceptive social media ads.
The new investigation was reported by Politico, citing sources.
Sens. John Curtis (R-Utah) and Adam Schiff (D-Calif.) urged the CFTC in a Thursday letter to dial up oversight, citing Wall Street Journal reporting on Polymarket’s alleged use of “deceptive videos” on social media. A consumer protection group separately sued the company Friday over allegedly deceptive ad campaigns.
CFTC and Polymarket did not immediately respond to requests for comment.
A Week Of Mounting Trouble
The regulatory heat arrives days after Polymarket disclosed a third-party vendor hack on Thursday that injected a malicious script into its frontend. On-chain analytics firm Bubblemaps estimated the attacker drained nearly $3 million from fewer than 15 wallets, with stolen USDC (CRYPTO: USDC) swapped into Ethereum (CRYPTO: ETH) and consolidated into a single address. Polymarket said it contained the breach and pledged to refund affected users in full.
Polymarket is no stranger to regulatory trouble. In 2022, the company paid $1.4 million to settle CFTC charges for illegally operating a financial exchange. The CFTC and DOJ later dropped separate investigations that had triggered a raid on CEO Shayne Coplan's New York home.
Founded in 2019 by Coplan, Polymarket remained largely under the radar before the 2024 election cycle catapulted prediction markets into the mainstream. Last year, the company added Donald Trump Jr. as an adviser, while his venture capital firm, 1789 Capital, also invested in the platform.
