Senators Urge CFTC Probe of Polymarket Ads, Influencers

U.S. senators ask CFTC to investigate Polymarket over ad practices

Two U.S. senators have formally asked the Commodity Futures Trading Commission (CFTC) to open an inquiry into Polymarket, a popular prediction market platform, following allegations that the company used deceptive advertising and undisclosed influencer campaigns to reach American consumers despite limiting domestic access.

In a letter obtained by The Wall Street Journal, Senators Adam Schiff and John Curtis urged CFTC Chair Michael Selig to review claims that Polymarket promoted simulated trading interfaces, staged transactions, and paid creators without adequate disclosure. The lawmakers stressed that, if validated, these tactics could amount to misleading marketing and consumer-protection failures in the prediction markets space.

Allegations from media probe: fake interfaces and hidden payments

The senators’ request follows a WSJ investigation alleging that Polymarket engaged content creators to film trades on mock or simulated trading pages rather than the live platform. The report also says some influencers did not disclose compensation and that promotional material overstated potential returns — a combination that can create an inaccurate impression of the risks and rewards for U.S. audiences.

Although Polymarket has restricted service to domestic users, the letter argues that promotional campaigns may still have targeted Americans and circumvented U.S. consumer-protection expectations. Schiff and Curtis asked the CFTC to confirm by July 10 whether it has opened a probe and, if not, to explain the rationale.

What senators want the CFTC to disclose

The lawmakers requested a written response detailing whether the CFTC has initiated an investigation and to clarify what consumer safeguards it expects prediction market operators to maintain. Their questions cover a range of protections that are especially relevant where gambling-like or speculative products intersect with blockchain-based platforms and crypto markets:

• Advertising standards and truthful marketing enforcement
• Age and identity verification procedures
• Responsible-gaming and addiction-mitigation tools
• Prominent risk and payout disclosures in promotional content
• Rules and transparency for affiliate marketing and paid influencers
• Specific disclosure requirements for sponsored content

Jurisdictional concerns: federal vs. state and tribal regulators

Schiff and Curtis also probed whether the CFTC has the legal authority, staff expertise, and budget needed to perform licensing, enforcement, and consumer protections traditionally handled by state and tribal gaming regulators. They warned that federal oversight should not become a loophole enabling operators to sidestep state or tribal laws or to erode consumer safeguards through aggressive or misleading marketing.

These jurisdictional questions come as the CFTC defends its assertion of exclusive authority over prediction markets in court. The agency recently sued Kentucky after state authorities moved against prediction market operators, including Polymarket and Kalshi, arguing that federal law grants the CFTC sole oversight over those products.

Regulatory pressure extends to crypto derivatives and perpetual futures

The letter arrives amid broader scrutiny of the CFTC’s role regulating crypto-linked derivatives. Last week, CME Group filed suit against the CFTC and Chairman Michael Selig after the agency approved U.S. crypto perpetual futures. CME’s complaint argues those contracts should be classified as swaps under the Dodd-Frank Act and accuses the CFTC of shifting long-standing interpretations without formal rulemaking.

CME’s legal challenge follows platforms including Kalshi and Coinbase receiving approval to list regulated crypto perpetual futures — a development that exchanges and market participants say has wide implications for derivatives oversight, market structure, and risk controls.

Interagency consultation and future rulemaking

In parallel, the CFTC and the Securities and Exchange Commission launched a 60-day public consultation on crypto derivatives regulation. The agencies are seeking input on portfolio margining across securities, swaps, futures, and related products while reassessing whether Dodd-Frank definitions for swaps and security-based swaps still reflect the current derivatives landscape.

SEC Chair Paul Atkins has suggested closer coordination between regulators could enhance market efficiency, tighten consumer protections, and reduce overlapping supervisory roles as crypto derivatives and tokenized financial products expand in the U.S.

Why this matters for prediction markets and crypto users

The senators’ request highlights two converging risks for blockchain-native prediction markets: potential deceptive marketing that misleads retail users — especially younger or inexperienced crypto traders — and regulatory uncertainty about which agencies and authorities will enforce consumer protections.

For market participants, developers, and investors, the inquiry signals heightened regulatory scrutiny of promotional practices, influencer marketing, and how emerging crypto products are presented to consumers. Operators of prediction markets and crypto derivatives platforms should prioritize robust disclosures, clear advertising policies, thorough identity controls, and responsible-gaming safeguards to reduce legal and reputational risks.

As the CFTC evaluates whether to open an investigation, the broader regulatory debate over crypto perpetual futures, derivatives classification, and interagency coordination will likely shape the future of prediction markets and consumer protections in the blockchain era.