Full Breakdown
CFTC Opens Multiple Investigations into Polymarket Trading Activity
By Drooid · · How we work
Investigation Overview
The Commodity Futures Trading Commission (CFTC) has initiated at least three previously undisclosed investigations into trading on the prediction-market platform Polymarket. In early May, CFTC chairman Michael Selig approved an order authorizing the agency’s enforcement division to conduct a private probe of potential insider trading involving event contracts tied to pardons that former President Joseph Biden might issue. The order permits testimony, subpoenas, oaths and document production. At the end of May, Selig approved a second order focused on “Iran event contracts” on Polymarket. Both orders lack public details about the specific trades under scrutiny.
Prior Media Reports Prompting Action
The timing of the investigations follows high-profile media coverage. An NPR report highlighted a Polymarket trader who earned more than $300,000 by correctly betting that Biden would grant pre-emptive pardons to prominent MAGA critics—including former representatives Liz Cheney, Adam Kinzinger, and Senator Adam Schiff—in the administration’s final days. Two weeks later, a *60 Minutes* segment described a network of Polymarket accounts that amassed $2.4 million on Iran-related contracts, achieving a 98 percent win rate. These reports appear to have spurred the CFTC’s recent orders.
Official Actions and Authority
The CFTC’s enforcement division now possesses formal authority to compel testimony and documents related to the two identified contract categories. The agency has not disclosed the identities of any suspected traders or the precise nature of alleged violations of the Commodities Exchange Act. No public statements have been issued by the CFTC beyond the voting records released through the Freedom of Information Act request.
Criticism and Opposition
Legal analysts have questioned the regulatory approach.
Verbatim Quotes
- “If these investigations are being prompted solely by press reports of potential violations of the Commodities Exchange Act, that’s a significant sign of weakness in this regulatory scheme,” — Joseph Konizeski, a former chief trial attorney in the CFTC’s division of enforcement
