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, a crypto-based prediction market that has operated in regulatory limbo since at least 2022.

The move follows 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. 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.

In January 2022, the CFTC issued an order requiring Polymarket to pay a civil penalty and wind down all markets accessible to U.S. persons. The agency found the platform had been operating an unregistered designated contract market—essentially a trading venue that should have been registered but wasn't. Polymarket cooperated with the investigation, which assisted resolution of the matter. The settlement did not, however, put Polymarket under ongoing regulatory supervision, and the platform 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 particular vulnerability in prediction markets, where participants can hold material non-public information about the underlying event.

Prediction markets carry a specific insider-trading risk. On Kalshi, a CFTC-regulated event contract exchange, three congressional candidates were fined in April 2026 for trading on their own election outcomes—a classic case of information asymmetry that regulators had warned about. Kalshi is 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 regulatory exposure. Staging fake trades to drive retail engagement falls within CFTC anti-fraud authority under the Commodity Exchange Act, FTC jurisdiction over deceptive advertising, and potentially securities law depending on how the underlying event contracts are characterized. Curtis and Schiff's letter to Chairman Behnam asks the CFTC what it knows and what it intends to do—a focused request that creates a formal record regardless of whether enforcement follows.

Wider Congressional Attention

Polymarket is not alone in drawing congressional scrutiny. 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—separate concerns about a regulated broker offering event contracts to retail customers without adequate disclosure.

The pattern across these episodes is congressional unease with how quickly 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. The agency has been working through its broader approach to event contracts ever since. That gap—between what is technically permissible and what is adequately supervised—is precisely where the Curtis-Schiff letter lands.

Chairman Behnam has been publicly cautious about prediction markets, though the CFTC's posture has shifted with political winds. The current commission composition and its appetite for a fresh Polymarket action will determine what happens next. The senators have created a formal demand for a response. Whether regulators treat the deceptive marketing as a standalone advertising fraud matter or as evidence of a platform that remains structurally non-compliant with its 2022 settlement will signal how seriously the CFTC intends to press the issue.