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The U.S. Commodity Futures Trading Commission (CFTC) has reopened an investigation into Polymarket over whether the prediction market platform broke a 2022 agreement to keep U.S. users off its offshore service.
The probe examines how the company checks users’ locations and enforces its restrictions, Reuters reported, citing two people familiar with the matter. According to the report, the CFTC is examining whether Polymarket did enough to prevent Americans from accessing its overseas platform.
Investigators are also examining the company’s advertising activities in the United States, as well as its customer onboarding processes and protections on its U.S. platform. The sources spoke anonymously because the investigation is confidential.
The renewed probe raises questions about why the CFTC and the U.S. Department of Justice (DOJ) closed similar investigations in 2025.
On July 15 that year, Polymarket CEO Shayne Coplan said both agencies had ended their investigations and cleared the company of wrongdoing. Neither agency has publicly explained why it closed the earlier cases.
Polymarket’s earlier agreement with the CFTC
The dispute goes back to 2022, when Polymarket agreed to stop offering its markets to U.S. users. The agreement followed CFTC allegations that the company had operated unlawfully in the country since launching in 2020.
However, Reuters reported that concerns about Americans circumventing the restrictions grew during the 2024 U.S. presidential election. Betting activity on Polymarket increased, prompting political commentators and social media users to question whether U.S. residents were finding ways to bypass the ban.
The CFTC opened an investigation into the company before the election. The Justice Department also launched a related probe, and the FBI searched Coplan’s New York home in November 2024. Both investigations were later closed.
How Polymarket says it blocks U.S. users
Polymarket has reportedly strengthened its systems to prevent restricted users from accessing its offshore platform. The company also prohibits users from employing virtual private networks (VPNs) and similar tools to circumvent its location restrictions.
A VPN can mask a user’s actual location by routing their internet connection through a server in another country. This can make it more difficult for platforms to determine where a customer is accessing a service.
In August 2026, Polymarket’s global head of investigations and intelligence, Shana Bautista, told Reuters that U.S. users bypassing the restrictions was not “a really prevalent issue.”
Insider betting adds to the scrutiny
Questions about the platform’s controls have also grown following an insider-betting case. In April 2026, U.S. authorities reportedly charged soldier Gannon Ken Van Dyke, alleging that he made $400,000 from bets on Polymarket’s offshore platform using information connected to his military role.
According to the indictment, Van Dyke used a VPN and a location-changing tool to make his connection appear to come from another country. He has pleaded not guilty. Polymarket said it referred the matter to authorities.
State lawsuits add to prediction market pressure
Polymarket is also facing a separate legal challenge from states in the U.S. For instance, in New York. Attorney General Letitia James and Governor Kathy Hochul sued the company’s U.S. operator in September 2026, alleging that it offered contracts linked to sports and other events without the required state authorization. The allegations have not been proven in court.
In short, prediction markets allow people to trade contracts based on possible outcomes, including elections, sporting events and government decisions. Their growth has raised concerns about insider trading and customer protection.
The Crypto Times has reached out to the CFTC and Polymarket for comment on the renewed investigation. Also, it’s important to note that the probe does not prove that the company broke the law, and it may not lead to enforcement action.
Also Read: Polymarket Uses Ex-FBI-Led System to Monitor Bettors Ahead of Midterms