Senators John Curtis and Adam Schiff have sent a letter to CFTC Chairman Michael S. Behnam demanding answers over reports of deceptive marketing by Polymarket, the crypto-based prediction market that has operated in a persistent regulatory grey zone since at least 2022.

The congressional pressure follows a series of Wall Street Journal investigations published between late June 2026 that documented a coordinated influencer campaign in which Polymarket paid social media creators to produce videos appearing to show real trades — but staged on dummy websites built to mimic Polymarket's interface almost exactly. In 70% of those videos, creators were shown placing bets on these fake lookalike platforms rather than on Polymarket itself. The campaign was designed to drive viral reach inside the United States, a market where Polymarket is prohibited from operating following a 2022 CFTC enforcement action.

That history matters. In January 2022, the CFTC issued an order requiring Polymarket to pay a civil monetary penalty and wind down all markets accessible to U.S. persons — the agency found the platform had been operating an unregistered designated contract market. Polymarket cooperated with the investigation, which the CFTC's Division of Enforcement noted materially assisted resolution of the matter. The settlement did not, however, produce ongoing supervisory oversight of the platform, and Polymarket continued to grow internationally.

A Pattern Regulators Have Already Flagged

The current marketing conduct sits against a backdrop of unresolved structural concerns. In January 2026, a group of senators led by Senator Catherine Cortez Masto raised concerns to the CFTC about Polymarket operating as an unregistered exchange and the absence of meaningful safeguards against insider trading — a recurring vulnerability in any market where participants can hold material non-public information about the underlying event.

Prediction markets present a specific insider-trading risk profile that differs from equities. On Kalshi, a CFTC-regulated event contract exchange, three congressional candidates were fined in April 2026 for trading on their own election outcomes — a textbook information asymmetry case that regulators had warned about. The Kalshi episode involved a registered venue with at least some oversight infrastructure. Polymarket, lacking that registration, has no equivalent enforcement layer for U.S.-accessible activity.

The deceptive marketing question is legally distinct from the unregistered-exchange issue, but it compounds the regulatory exposure. Staging fake trades to drive retail engagement touches on CFTC anti-fraud authority under the Commodity Exchange Act, FTC jurisdiction over deceptive advertising, and potentially securities law analogues depending on how the underlying event contracts are characterised. Curtis and Schiff's letter to Chairman Behnam asks the CFTC specifically to address what it knows and what, if anything, it intends to do — a targeted ask that sets up a paper trail regardless of whether formal enforcement follows.

Wider Congressional Attention

Polymarket is not the only prediction market platform drawing congressional fire. In December 2024, Congressman Sean Casten, Senator Jeff Merkley, Senator Chris Van Hollen, and Congressman Brad Schneider questioned Robinhood over its foray into election betting — a separate set of concerns about a regulated broker offering event contracts to retail customers without what legislators considered adequate disclosure.

The throughline across these episodes is congressional unease with the speed at which prediction markets have scaled retail participation ahead of any coherent federal framework. The CFTC approved Kalshi's election-event contracts in 2024 after years of litigation, and the agency has been working through its broader approach to event contracts ever since. That regulatory gap — between what is technically permissible and what is adequately supervised — is exactly where the Curtis-Schiff letter lands.

Chairman Behnam has been publicly cautious about the prediction market space, but the CFTC's posture has oscillated with political winds. The current commission composition and its appetite for a fresh Polymarket action will be the operative variable here. The senators have created a formal demand for a response; what comes back, and how quickly, will signal whether regulators treat the deceptive marketing conduct as a standalone ad-fraud matter or as evidence of a platform that remains structurally non-compliant with its 2022 undertakings.