A bipartisan pair of U.S. senators is demanding answers from the Commodity Futures Trading Commission regarding allegations that the prediction market platform Polymarket staged fake bets as a marketing tactic.
Senators Adam Schiff of California and John Curtis of Utah sent a letter to CFTC Chairman Michael Selig. They are responding to a Wall Street Journal report alleging Polymarket paid for the creation of $1.9 million in fake trades to generate platform hype.
The senators expressed concern the CFTC is not adequately enforcing its authority over prediction markets and cannot provide necessary consumer protections. They argue the platforms are being marketed with promises of "fast money" and influencer hype, blurring the line between investing and gambling.
The inquiry adds to mounting regulatory pressure. Prediction markets have faced accusations of operating as illegal gambling operations in some states, along with separate insider trading allegations.
The senators requested a response from Chairman Selig by July 10th. A Polymarket representative told the Wall Street Journal the company would conduct a comprehensive audit of its promotional materials. The CFTC is reportedly conducting its own extensive investigation into the platform.