Senators John Curtis and Adam Schiff have formally requested the Commodity Futures Trading Commission investigate Polymarket's promotional tactics.
The request follows a Wall Street Journal investigation. It documented a coordinated influencer campaign where Polymarket paid college-age promoters to post videos on X, showcasing what appeared to be genuine, profitable trades.
The investigation found those wins were fabricated. The 118 paid ads displayed cumulative profits of nearly $900,000. However, the same positions placed on Polymarket's real platform would have resulted in losses exceeding $166,000.
Influencers were reportedly paid up to $3,000 per month. They were instructed not to disclose this payment, a direct violation of Federal Trade Commission rules.
Polymarket settled with the CFTC in 2022 for operating an unregistered facility. As part of that deal, it agreed to block U.S. users. The senators argue the new campaign targeted U.S. audiences, potentially violating that settlement.
The case strikes at the core of prediction markets. These platforms trade on their reputation for accuracy and transparency. Advertising based on fabricated data undermines that fundamental value proposition, misleading users about the platform's very nature.