Polymarket faces new CFTC probe over social media activity

Investing.com -- The US Commodity Futures Trading Commission has opened a new investigation into prediction market platform Polymarket, Bloomberg reported Friday. The probe examines social media activity connected to the company.

The Wall Street Journal previously reported that Polymarket hired dozens of social media creators, mostly college-aged, to film themselves making fabricated trades with fake wins. The purpose was to attract new users to the platform.

The investigation covers additional aspects of Polymarket's business operations beyond social media practices. This marks a renewed focus on the company after both the CFTC and the Justice Department concluded separate investigations last year. Those probes examined whether Polymarket violated restrictions on US traders accessing its main platform.

Under a 2022 CFTC settlement, Polymarket's primary platform is prohibited from serving American customers. Some US users have bypassed this restriction using tools such as virtual private networks.

The platform allows users to wager on various events, from congressional elections to the World Cup. Polymarket faces questions about possible insider trading and controversial betting options. The company has also moved slowly in launching its CFTC-regulated exchange for American customers.

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