Two senators sent a letter to the Chairman of the CFTC calling the findings from a WSJ investigation “troubling”.
According to an investigation by the Wall Street Journal, Polymarket had staged transactions on simulated websites, through undisclosed paid influencer promotion to promote prediction market activity online. These simulated sites were designed to look like Polymarket’s real website so the fake trades would appear as if they were really executed. Many of these college aged creators making these videos failed to disclose that the content was paid promotion for Polymarket.
The CFTC brought enforcement action against Polymarket for illegally operating an unregistered event-based binary options trading platform. In plain language, they did not file the proper paperwork to operate. Polymarket had to pay a $1.4 million civil monetary penalty, and shut down markets that were uncompliant.
In the letter written by Senators John Curtis (R., Utah) and Adam Schiff (D., Calif.) they wrote about these findings from the WSJ report, and said that “if accurate these allegations are deeply troubling and demand immediate scrutiny.” They argue that the way prediction markets have portrayed trading event contracts as “free money” making it no different than gambling.
The letter closed with 6 questions the senators had to ask the CFTC regarding their involvement, or lack thereof, with Polymarket’s regulation and reiterates that Polymarket (or similar companies) should not invoke CFTC oversight to avoid having to follow traditional gaming regulations, that casinos or sports-betting apps do.
Saber News Channel reached out to Polymarket, the U.S. Commodity Futures Trading Commission, and Senator John Curtis’s office for comment prior to publication. This story will be updated as responses are received.
