CFTC Revives Polymarket Probe as VPN Insider Case Heads to Trial: Reuters

Geolocation Controls Back Under the Microscope

The CFTC is investigating whether prediction marketplace relation Polymarket violated a 2022 enforcement woody in which it promised to prohibition U.S. users from its main overseas platform, Reuters reported connected Tuesday, citing 2 radical acquainted with the matter. The enquiry revives 1 the bureau closed past twelvemonth without bringing charges, and sits wrong a broader probe the CFTC opened into the institution earlier this year.

According to the sources, the bureau is examining however Polymarket determines wherever its customers are located and its advertizing activities successful the U.S. It is besides scrutinizing the onboarding processes and lawsuit protections connected Polymarket’s U.S. platform. One of the radical said the absorption is connected the company’s past controls and processes. Spokespeople for the CFTC and Polymarket declined to comment, and Reuters noted that probes are not needfully an denotation of wrongdoing.

The 2022 woody dates to January of that year, erstwhile the CFTC fined Polymarket $1.4 million for offering unregistered event-based binary options. As 2024 U.S. predetermination betting connected the level grew, the CFTC opened a probe into whether Polymarket was complying with the settlement, the Justice Department opened a related investigation, and the FBI searched CEO Shayne Coplan’s New York location successful November 2024.

Both agencies closed their probes successful July 2025, and Polymarket bought a CFTC-licensed speech and began relaunching successful the U.S. precocious past year. Reuters said the caller details “raise caller questions” implicit wherefore those earlier probes were closed. A Justice Department spokesperson declined to comment.

The Wall Street Journal and Bloomberg archetypal reported a wide CFTC probe of Polymarket successful June, soon aft the Journal found that Polymarket paid creators to signifier fake winnings successful a run aimed astatine U.S. users, the level was barred from serving.

The geolocation question is besides cardinal to what prosecutors telephone the archetypal insider-trading prosecution of a prediction marketplace trader. U.S. District Judge Margaret Garnett connected Monday denied a question to dismiss the indictment of Army Master Sergeant Gannon Ken Van Dyke, who is accused of betting connected Polymarket up of the U.S. cognition that captured Venezuelan President Nicolás Maduro and turning astir $34,000 into much than $400,000. According to the indictment, Van Dyke accessed Polymarket’s offshore level utilizing a VPN and an “exit mode” that geolocated to a overseas country.

Van Dyke pleaded not blameworthy successful April, and his lawyers argued that his wagers were not amerciable swaps nether national commodities law. Garnett ruled that question could not beryllium settled astatine this stage, penning that the question could win “only if the lawsuit contracts alleged successful the indictment cannot beryllium swaps arsenic a substance of law, and Van Dyke has failed to marque that showing.” His proceedings is tentatively scheduled for Dec. 7.

Polymarket has said it referred the Van Dyke substance to authorities and that it has revamped its controls. The level said it expressly prohibits VPNs and akin tools utilized to get astir its geographic restrictions. Its planetary caput of investigations and intelligence, Shana Bautista, told Reuters successful August that U.S. users circumventing the restrictions was not “a truly prevalent issue.” This week, Bautista told NPR that Polymarket had investigated dozens of bets tied to the midterm elections up of the Nov. 3 vote.