Bipartisan Senators Ask CFTC Chair Whether Agency Is Investigating Polymarket's Fake-Bet Campaign

--- title: Bipartisan Senators Ask CFTC Chair Whether Agency Is Investigating Polymarket's Fake-Bet Campaign excerpt: Senators Adam Schiff and John Curtis sent a letter to CFTC Chair Michael Selig Thursday asking whether the agency is investigating Polymarket's paid influencer scheme, putting the regulator in a bind over a platform it licenses but whose staged trades ran on an offshore site beyond its direct reach. ---

Two senators spanning the political divide pressed the Commodity Futures Trading Commission this week to answer whether it is investigating Polymarket over a staged-trading campaign that, according to the Wall Street Journal investigation, generated more than 140 million views across TikTok, Instagram, and YouTube.

In a letter dated Thursday to CFTC Chair Michael Selig, Sen. Adam Schiff (D-Calif.) and Sen. John Curtis (R-Utah) cited the Journal investigation, which found Polymarket paid creators monthly fees to film trades on dummy sites built to mimic its real platform. None of the roughly $1.9 million in apparent winnings shown across more than 1,100 videos was real, CBS News reported. The Journal also reported that creators were instructed not to disclose the paid relationship, a direct breach of Federal Trade Commission influencer-disclosure rules. TechCrunch separately reported that a marketing contractor helped amplify the videos.

The senators set a deadline in the coming weeks for a written response. They asked Selig to confirm whether the CFTC is investigating, and if not, to explain why.

Jurisdictional Bind

The letter arrives at an awkward moment for the agency. Last January, the CFTC granted Polymarket an amended designation that allows it to onboard U.S. customers. But the staged trades the senators cited ran on Polymarket's offshore platform, the one the CFTC does not directly oversee. That gap gives the regulator a narrow lane: it can examine whether the offshore campaign violated the terms of Polymarket's U.S. registration, but any action against the foreign-platform conduct faces a harder evidentiary threshold.

Schiff and Curtis pressed Selig on exactly that question, asking whether the CFTC, given its claim to exclusive jurisdiction over prediction markets, has "the authority, resources, and expertise" to replicate the consumer-protection, licensing, and enforcement work that state and tribal gaming regulators currently perform. They also asked what advertising standards, age-verification rules, addiction warnings, and influencer-disclosure requirements the CFTC currently imposes on platforms like Polymarket.

Enforcement Headwinds

Fortune reported Monday that meaningful regulatory consequences are unlikely under the current administration. The CFTC has shed roughly a quarter of its staff over the past year and pushed out career officials who sought to investigate crypto and prediction-market companies, according to a New York Times investigation. Selig, the agency's sole sitting commissioner, previously represented crypto and prediction-market companies as a corporate lawyer.

Legal experts cited by Fortune said the FTC, not the CFTC, may have the cleaner enforcement path, given that the staged videos were a straightforward advertising issue. Neither agency has made a public statement on whether it plans to act.

Polymarket has made no public statement beyond the audit commitment it issued in response to the Journal's investigation. "We are conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements," a Polymarket spokesperson told CBS News.

State-Preemption Warning

Schiff and Curtis also used the letter to push back on the CFTC's ongoing campaign to assert federal supremacy over state gaming laws. The agency has sued nine states, including Kentucky, since earlier this year to block them from applying their own gaming regulations to Polymarket and competitor Kalshi.

The senators warned Selig against allowing companies to invoke CFTC oversight as a shield against state consumer-protection laws. That framing converts the Polymarket fake-bet story into a broader regulatory-architecture question: if the CFTC is the sole gatekeeper for a rapidly expanding prediction-market sector, it needs to show it can actually police conduct on the platforms it licenses.

Polymarket settled a previous CFTC action in 2022, paying a $1.4 million civil penalty for operating an unregistered options exchange and agreeing to stop serving U.S. customers. The January 2026 license marked its return to the U.S. market.

The senators' deadline gives Selig a matter of weeks to respond before the Senate's summer recess window begins to narrow.