Feds Re-Open Probe Into Polymarket's Compliance with US Trader Ban

The Commodity Futures Trading Commission (CFTC) is reportedly re-examining whether Polymarket, a prediction market platform, adhered to a 2022 agreement to block U.S. traders from its offshore operations. The investigation, cited by Reuters based on two sources familiar with the matter, focuses on the company's methods for identifying users' locations and its advertising practices within the United States.

This renewed scrutiny comes shortly after The Post reported on the dismissal of a top Polymarket executive closely aligned with CEO Shayne Coplan. Matthew Modabber, who served as chief marketing officer since January 2024, was let go following a series of incidents that triggered an internal investigation.

A source indicated that the current CFTC inquiry pertains to Polymarket's past compliance measures rather than ongoing access to its offshore platform. Separately, the CFTC is also investigating a newer, federally regulated U.S. operation run by Polymarket, concentrating on its customer registration and trader protection procedures.

Previous investigations by the CFTC and the Justice Department, which concluded last year without charges, are also relevant. The reasoning behind the closure of those probes has not been publicly disclosed. In January 2022, Polymarket agreed to restrict U.S. trading on its main platform after the CFTC accused it of operating an unregistered derivatives trading platform. The company paid a $1.4 million fine and committed to ceasing non-compliant trading activities.

The restrictions led to concerns during the 2024 presidential election regarding the use of virtual private networks (VPNs) by Americans to circumvent geographic limitations. These concerns intensified, culminating in an FBI search of CEO Shayne Coplan's Manhattan home in November 2024.

In July 2025, Coplan announced that both the CFTC and Justice Department had closed their investigations, stating Polymarket had been cleared of wrongdoing. Just six days later, the company announced its acquisition of a federally regulated derivatives exchange and clearinghouse for $112 million, signaling a move to re-enter the U.S. market. Polymarket began a phased rollout of its regulated U.S. platform to select customers late last year.

The prediction market industry has seen significant growth under the current administration, with President Trump's son, Donald Trump Jr., listed as an investor in Polymarket. This expansion has also drawn attention from lawmakers and advocacy groups over potential insider trading related to real-world events.

In April, federal authorities charged U.S. Army soldier Gannon Ken Van Dyke with using classified information about the operation to capture Venezuelan leader Nicolás Maduro to profit on Polymarket’s offshore platform. Prosecutors alleged Van Dyke used a VPN to conceal his location, and he has pleaded not guilty. Polymarket stated at the time that it had referred the matter to authorities.

The company has consistently asserted that its safeguards effectively block most unauthorized U.S. traders and that attempts to bypass geographic restrictions are infrequent. Representatives for both the CFTC and Polymarket declined to comment to Reuters, and Polymarket also declined to comment to The Post.