$1.4 Million Fine Revives CFTC Scrutiny of U.S. Access Controls at Polymarket
Key Facts
The U.S. Commodity Futures Trading Commission is re-examining whether Polymarket took sufficient steps to prevent U.S. users from accessing its offshore platform, Reuters reported, citing two people familiar with the matter. The review is tied to a 2022 settlement between the commission and operator Blockratize, which included a civil penalty of $1.4 million. The examination also covers customer geolocation controls and advertising activity in the United States, Reuters reported. The commission is also reviewing customer registration and safeguards on the company’s U.S. platform, which began rolling out in late 2025. The new investigation is part of a broader probe the commission opened into the company during 2026, with one part focused on Polymarket’s earlier controls and procedures.
On January 3, 2022, the commission ordered Blockratize to pay the fine and wind down noncompliant markets listed on Polymarket.com. In its settlement announcement, the commission said the company had offered off-exchange binary options contracts tied to events without registering or obtaining the required regulatory designation. The commission found that the contracts in question were swaps within its jurisdiction. It said the platform had offered more than 900 event markets since its launch. The commission said the company’s cooperation with the investigation was reflected in the reduced penalty, and described at the time the scope of the action required of the company concerning the noncompliant markets.
The review of access controls concerns the separation between Polymarket’s international service and the U.S. market. The company describes its international platform as intended for users outside the United States and prohibited jurisdictions, and says it offers blockchain-based prediction markets. By contrast, the commission registered QCX LLC, doing business as Polymarket US, as a designated contract market on July 9, 2025. The official registration page lists the entity’s status as “designated.” The company said it explicitly prohibits the use of virtual private networks or similar tools to circumvent geographic restrictions, and has controls to monitor violations and prevent prohibited users from accessing its offshore platform.
In August 2026, Shana Bautista, Polymarket’s head of global investigations and intelligence, told Reuters that circumvention of the restrictions by U.S. users “wasn’t really a widespread problem.” Her comments come as the commission examines geolocation, advertising, registration and safeguards on the U.S. platform. In July 2025, the company’s chief executive said the commission and the Justice Department had closed two earlier investigations into the company on July 15 without bringing charges. That makes the broader investigation opened in 2026 separate from the two earlier probes that were closed. Reuters also reported that spokespeople for the commission and Polymarket declined to comment on the current review.
In a separate case, authorities in April 2026 charged a U.S. soldier accused of making $400,000 from insider bets on the offshore platform, Reuters reported. The soldier pleaded not guilty, according to the report. The case is not directly related to the company’s compliance with the 2022 settlement, but it places access controls on the offshore platform in a broader regulatory context. At the industry level, the NBA reached agreements with Polymarket and Kalshi to make them the league’s preferred prediction markets. The league also announced an agreement with the commission that reflects a commitment to appropriate regulatory oversight and protecting the integrity of related markets.
Regulatory disputes over prediction markets extend beyond the investigation into Polymarket; the Associated Press reported that more than a dozen states are engaged in legal disputes over these markets. The Commodity Futures Trading Commission asserts that it has exclusive jurisdiction over oversight, while some states consider the matter to fall within their jurisdiction. At the time of the agency’s report, the NFL had asked the Supreme Court to resolve the question of how prediction markets should be regulated. The dispute places the boundaries of federal and state authority at the center of the sector’s commercial expansion. The available report did not specify when the current review’s findings would be announced or whether further action would follow.