Polymarket Under Fresh CFTC Scrutiny Over US Trader Access

Decentralised prediction market Polymarket is facing renewed scrutiny from the United States Commodity Futures Trading Commission (CFTC), with regulators examining whether domestic participants have been trading on its offshore platform.

The inquiry centres on whether American users are bypassing geographic restrictions designed to prevent them from trading event contracts on the venue. Polymarket, which operates on the Polygon blockchain, settled previous regulatory action with the agency in early 2022, paying a $1.4 million fine and agreeing to bar US-based participants while restructuring its offerings outside the jurisdiction.

Under US commodities regulations, platforms facilitating trading in event contracts—agreements that pay out based on the resolution of real-world occurrences—must register with the CFTC as designated contract markets or swap execution facilities. While regulated domestic competitors operate under direct federal licences, offshore and crypto-native platforms rely on geoblocking and screening controls to keep American retail investors from participating.

The fresh investigation highlights ongoing friction between cross-border, blockchain-based venues and financial regulators seeking to enforce jurisdictional boundaries. How the CFTC handles access controls on offshore exchanges is widely watched across the prediction market sector, where volumes have surged around political, economic, and cultural events.