Senators Demand Answers From CFTC Over Polymarket’s Alleged Deceptive Ads

A pair of senators have been looking for answers from the Commodity Futures Trading Commission lately Wall Street Journal The report that Polymarket allegedly paid In exchange for organizing fake bets worth $1.9 million as part of a marketing campaign.

In a letter to CFTC Chairman Michael Selig, Senators Adam Schiff (D-Calif.) and John Curtis (R-Utah) sought answers to six questions, including whether or not the CFTC is investigating these allegations and whether the regulator believes it has the authority and expertise to implement the same consumer protections as other regulators.

“The CFTC has repeatedly asserted its regulatory authority over prediction markets and event contracts, including through its enforcement actions and rules governing event contracts listed at CFTC-registered entities.” The senators wrote.

“However, with content creators routinely portraying prediction markets as ‘free money,’ there is little basis for treating them differently from gambling,” they added.

Prediction market platforms like Polymarket have come under fire throughout the year as the Commodity Futures Trading Commission (CFTC) asserts its regulatory authority over the booming industry. Some countries have claimed that The platforms operate illegal gambling operationswhile other issues emerged Related to allegations of insider trading.

The recent report, alleging that creators entered into trades in a fake version of Polymarket to drum up interest in the platform, only adds to the intense scrutiny.

“This demonstrates why the Commission is skeptical of claims that sports, entertainment and other wagering contracts are materially different from gambling simply because they are offered through event contracts,” they wrote.

“With the promises of quick money, influencer marketing, the spread of social media, and the deliberate blurring of what is real and what is fabricated, it is not surprising that Americans view buying event contracts in prediction markets as closer to gambling than investment,” they added.

The pair, who said they were “concerned” that the CFTC was not adequately enforcing the laws under its jurisdiction, asked for a response to their questions by July 10.

Of the report in question, a Polymarket representative said Wall Street Journal It will conduct a comprehensive review of its promotional materials.

Friday, The Wall Street Journal It stated that the CFTC is in the midst of an “ongoing and extensive investigation” into Polymarket — but it is unclear whether the investigation is specifically focused on advertising claims.