U.S. senators have asked the Commodity Futures Trading Commission (CFTC) to open a probe into Polymarket, alleging the prediction-market platform used deceptive advertising to attract American users despite restricting domestic access.
In a letter obtained by The Wall Street Journal, Senators Adam Schiff and John Curtis urged CFTC Chair Michael Selig to investigate claims that Polymarket promoted its markets using simulated trading webpages, staged transactions, and paid influencer campaigns that were not properly disclosed. The senators pointed to a WSJ investigation reporting that Polymarket hired content creators to record trades on fake interfaces rather than the live platform, that some influencers failed to disclose payments, and that promotions exaggerated potential winnings—creating a misleading impression for U.S. audiences even though Polymarket says it does not serve domestic users.
Schiff and Curtis asked the CFTC for a written response by July 10 confirming whether an investigation has been opened; if not, they requested an explanation for that decision. They also asked the agency to detail the consumer protections it expects prediction-market operators to maintain, including standards for:
- advertising and influencer disclosures
- age verification
- responsible-gaming tools and addiction warnings
- affiliate marketing practices
The senators further questioned whether the CFTC has the authority, expertise, and resources to perform oversight functions typically handled by state and tribal gaming regulators—such as licensing, enforcement, and consumer protection—while asserting exclusive federal jurisdiction over prediction markets. They warned that federal oversight should not become a vehicle for companies to sidestep state or tribal gaming laws or weaken protections through misleading promotions.
The request lands amid broader regulatory and legal turbulence for the CFTC. Earlier this week the agency sued Kentucky after state authorities moved against prediction-market operators, including Polymarket and Kalshi, with the CFTC arguing federal law grants it sole oversight. At the same time, CME Group has sued the CFTC and Chair Selig over the agency’s approval of U.S. crypto perpetual futures—arguing those contracts should be treated as swaps under the Dodd-Frank Act and that the CFTC deviated from long-standing interpretations without formal rulemaking. CME CEO Terrence Duffy had signaled legal action after venues such as Kalshi and Coinbase received approvals to list regulated crypto perpetual futures.
Adding to the policy debate, the CFTC and the Securities and Exchange Commission opened a 60-day public consultation on crypto derivatives regulation. The agencies seek feedback on issues including portfolio margining across securities, swaps and futures, and whether Dodd-Frank definitions governing swaps and security-based swaps remain fit for today’s derivatives markets. SEC Chair Paul Atkins said closer coordination could boost market efficiency, strengthen consumer protections, and reduce overlapping responsibilities as crypto derivatives and tokenized financial products expand in the U.S.
The senators’ letter underscores growing scrutiny of how prediction-market operators market to U.S. audiences and places additional pressure on the CFTC as it defends and defines its role in overseeing crypto-linked products.
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