Three investigations into Polymarket that regulators never disclosed are now public, and they trace back further than anyone outside the CFTC previously knew. The agency's enforcement division quietly opened probes into trading around Biden-era pardons, Iran-related event contracts, and a Google Year in Search market, according to documents obtained under a Freedom of Information Act request. None of the three had been acknowledged by the Commodity Futures Trading Commission before the documents surfaced.
The first order came in early May, when CFTC Chairman Michael Selig approved a private investigation into potential insider trading on Polymarket markets tied to pardons issued by former President Joe Biden. The timing lines up with an NPR report from weeks earlier that identified a trader who netted more than $300,000 on pardon-related markets in the final days of the Biden administration — correctly wagering, ahead of the public announcement, that Biden would issue a wave of pre-emptive pardons shielding prominent critics of Donald Trump from prosecution. That kind of precisely timed, high-conviction bet is exactly the pattern regulators look for when screening prediction markets for leaked information.
The second order followed at the end of May, this time targeting Iran event contracts on Polymarket. It came roughly two weeks after 60 Minutes aired a segment on a network of accounts that had made a combined $2.4 million trading Iran-related markets with a 98% win rate — a hit rate high enough to make chance an implausible explanation. Win rates in that range typically point to either genuinely superior analysis or access to information not yet public, and regulators treat the latter as the default hypothesis worth ruling out first.
The third and least-detailed of the probes covers a market tied to Google's own Year in Search rankings, opened later in the summer. Less is publicly known about what triggered scrutiny there, though its inclusion alongside the pardons and Iran probes suggests the CFTC's enforcement arm has been treating anomalous trading patterns on Polymarket as a recurring, not isolated, concern over the past several months.
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None of this comes as a total surprise to anyone who has watched Polymarket's regulatory trajectory this year. The platform has already drawn scrutiny well beyond these three cases — it reportedly referred dozens of suspected military-related insider trading cases to the Justice Department on its own initiative, and its overseas equivalent, prediction markets generally, have run into direct bans in some jurisdictions, with South Korea blocking Polymarket outright as illegal gambling earlier this year. In the U.S., the fight over how prediction markets should be regulated at all is still unresolved, playing out in parallel through a jurisdictional battle between CFTC rules and state courts.
What makes these three probes notable is less the underlying allegations — insider trading suspicions have dogged prediction markets since long before Polymarket existed — than the fact regulators sat on all three without public comment for months while the CLARITY Act debate and other prediction-market fights played out in full view. It raises an obvious question about how much unreported enforcement activity is happening behind the industry's more visible regulatory battles, and whether Polymarket's growing pains are being managed more through quiet subpoenas than the public rulemaking process everyone has been watching instead. Selig has said publicly that crypto rules are coming with or without Congress, and these disclosures suggest the enforcement side of that promise has already been in motion for months.
FAQ
What is Polymarket being investigated for?
US regulators opened separate, previously unreported probes into whether traders used non-public information to profit from Polymarket bets on Biden-era pardons, Iran-related events, and a Google Year in Search market.
Has the CFTC confirmed the investigations?
The CFTC has not made a public statement confirming the probes; what is known comes from internal approval orders obtained through a Freedom of Information Act request.
What made regulators suspicious in the first place?
Reporting on unusually well-timed, high-win-rate trades — including one trader netting over $300,000 on pardon markets and a network that won 98% of its Iran-related trades — preceded each of the CFTC's approval orders.
Could this affect Polymarket's US operations?
It adds to an already crowded list of regulatory pressures on the platform, though insider-trading probes into individual traders are distinct from questions about Polymarket's own licensing and operating status.
