The US Commodity Futures Trading Commission (CFTC) has reportedly reopened an investigation into the prediction market platform Polymarket. The agency is examining whether the company complied with a 2022 settlement agreement that required it to block users located in the United States. The probe also extends to a licensed exchange recently acquired by the platform.
The regulatory scrutiny follows a case involving Master Sgt. Gannon Ken Van Dyke, who allegedly used classified information regarding an operation against Venezuelan leader Nicolás Maduro to place bets. Prosecutors claim the soldier utilized a VPN to bypass location restrictions, placing 13 wagers totaling approximately $33 000. These bets reportedly generated $409 881 in profit.
Van Dyke has pleaded not guilty to the charges. His legal team argues that the wagers in question constitute event contracts rather than swaps, which fall under the regulatory jurisdiction of the CFTC. Judge Margaret Garnett denied a motion to dismiss the case, and a trial is tentatively scheduled for December 7.
Polymarket stated that it has updated its internal controls and reported the suspicious trades to law enforcement. Meanwhile, the platform faces additional pressure from a lawsuit in New York alleging the operation of an illegal gambling business, as well as an ongoing inquiry by the House Oversight Committee regarding potential insider trading.
