The Commodity Futures Trading Commission is again examining whether Polymarket breached a 2022 settlement by allowing US users to access its offshore prediction-market exchange, according to reporting cited by Bitcoin Magazine. The inquiry revives a case the agency closed in 2025 without bringing charges.
What the CFTC is examining
Polymarket agreed in January 2022 to pay a $1.4 million penalty after the CFTC alleged that it offered event-based binary options without the required registration. As part of that settlement, the company agreed to prevent users in the United States from trading on its offshore platform.
The renewed inquiry is reportedly focused on whether those restrictions worked in practice. Investigators are examining Polymarket’s systems for determining users’ locations, its advertising within the United States, and the onboarding process and customer protections connected with the company’s US platform, which launched late last year.
Polymarket has used geofencing tools to restrict access based on location. However, regulators and critics have raised concerns about US-based traders reaching the offshore exchange through virtual private networks, or VPNs, which can make internet traffic appear to originate in another country.
The company is headquartered in New York, while its offshore exchange is operated through an entity registered in Panama. The distinction between the US business and the offshore platform is central to the regulatory question. A probe is an investigation rather than a formal finding of wrongdoing, and the source material notes that investigations can end without enforcement action.
Regulatory pressure beyond the renewed probe
The CFTC inquiry comes amid broader scrutiny of Polymarket and the prediction-market sector. In June, the Wall Street Journal reported that Polymarket paid people to create videos showing fictitious winning bets. Senators Adam Schiff and John Curtis then asked the CFTC to investigate. Bloomberg has also reported that regulators were examining the company’s activity on social media.
The agency’s current leadership has offered a mixed backdrop of policy support and enforcement warnings. CFTC Chairman Michael Selig has described prediction markets as tools for hedging and for discovering information, and has argued that federal regulators should oversee them rather than state authorities. At the same time, enforcement director David Miller has promised firm policing of the sector.
A separate criminal case has highlighted the practical difficulties of keeping offshore markets closed to US participants. In April, prosecutors charged US soldier Gannon Ken Van Dyke with allegedly making $400,000 from insider bets on Polymarket’s offshore platform. The indictment says he used a VPN and an “exit mode” that appeared to place him outside the United States. Van Dyke has denied the charges, while Polymarket says it referred the matter to authorities.
Why the platform’s scale matters
The regulatory stakes have grown alongside Polymarket’s profile. Intercontinental Exchange, the parent company of the New York Stock Exchange, agreed in October 2025 to invest approximately $2 billion in the business. Bloomberg also identified Polymarket founder Shayne Coplan, 27, as one of the youngest self-made billionaires.
That growth makes the effectiveness of Polymarket’s geographic controls more consequential. If the CFTC concludes that American users were able to trade on the offshore exchange, the issue could affect the company’s compliance obligations and its effort to operate prediction markets within US law. The current inquiry, however, does not establish that a violation occurred.
Polymarket has also expanded its appeal to cryptocurrency users. It added bitcoin deposits in October 2025 as part of a wider effort to let customers fund accounts with digital assets. That development links the platform more closely to crypto markets while placing additional attention on how accounts are opened and monitored.
The platform has faced questions about market integrity as well. A study found that a small group of traders exploited Polymarket’s five-minute Bitcoin up-or-down contracts by pushing Binance’s price during the final seconds before settlement. The study attributed $8.2 million in gains to 821 wallets—about one in every 300 traders—and said retail bettors absorbed 93% of the losses in the affected cycles.
The researchers did not find manipulation in the platform’s 15-minute contract, saying a longer observation period diluted the effect of a fixed price push. The findings are relevant beyond Polymarket because Nasdaq and Cboe have filed to list similar binary contracts based on equity indexes.
Current crypto market picture
Moneyiar market data at 22:39 on October 25, 2026, showed Bitcoin at $80,430.51, down 0.08% over 24 hours and 1.32% over seven days. Ethereum stood at $2,342.06, up 0.02% in 24 hours but down 1.77% over the week. Polygon’s successor token, POL, traded at $0.08981, up 0.39% over 24 hours and down 0.74% over seven days. Moneyiar’s data listed Polygon under the MATIC symbol without a price.
