Two US senators are pressing the Commodity Futures Trading Commission (CFTC) to explain its oversight of prediction market platform Polymarket following a Wall Street Journal report alleging the company staged fake bets. In a letter to CFTC Chairman Michael Selig, Senators Adam Schiff (D-CA) and John Curtis (R-UT) raised concerns that the regulator may not be adequately enforcing laws or protecting consumers.
The Wall Street Journal reported that Polymarket paid for $1.9 million in fabricated wagers as part of a marketing campaign, according to the senators' letter. Schiff and Curtis asked the CFTC six specific questions, including whether the agency has investigated Polymarket's marketing practices and what steps it is taking to ensure compliance with anti-fraud provisions.
The letter adds to growing scrutiny of prediction markets, which allow users to bet on outcomes of events like elections and sports. Polymarket has faced previous allegations of insider trading, and the latest claims raise questions about the integrity of its platform. The senators expressed concern that the CFTC may lack the resources or authority to effectively regulate these emerging markets.
Polymarket has not publicly commented on the allegations. The CFTC has not yet responded to the senators' letter. The outcome of this inquiry could influence future regulation of blockchain-based prediction markets in the US.
The senators' demands come amid a broader push for clearer crypto regulations. Lawmakers have been debating the role of agencies like the CFTC and SEC in overseeing digital assets, and this case highlights potential gaps in consumer protection.