CFTC Revives Polymarket Settlement Probe as Soldier’s Case Advances

The U.S. Commodity Futures Trading Commission is investigating whether Polymarket violated a 2022 settlement requiring it to keep American users off its offshore platform, Reuters reported on October 27, citing two people familiar with the matter. The scrutiny concerns whether the company’s restrictions were sufficient, rather than an announced finding of wrongdoing.

According to Reuters, investigators are examining customer-location checks and U.S. advertising as part of a broader inquiry opened earlier this year. One person familiar with the investigation said the review focuses on the company’s past controls and processes.

The original enforcement action dates to January 2022, when the CFTC ordered Polymarket to pay a $1.4 million civil penalty. The agency said the company had offered event-based binary options without the required registration and directed it to wind down markets that did not comply with federal commodities law.

Reuters reported that earlier investigations into compliance with the settlement ended in 2025 without charges. Polymarket says it has strengthened its controls, prohibits virtual private networks used to evade geographic restrictions and monitors for misconduct and restricted users.

The renewed scrutiny coincides with a separate criminal prosecution involving Gannon Ken Van Dyke, a U.S. soldier accused of using classified information to trade on Polymarket. Prosecutors allege his bets concerned the military operation to capture Venezuelan leader Nicolás Maduro, an operation in which he participated.

The Justice Department announced the charges in April, alleging that Van Dyke used confidential knowledge obtained through his military duties to generate more than $400,000 in profits. The indictment alleges he accessed the offshore platform through a VPN connection that appeared to originate abroad. He has pleaded not guilty, and the allegations remain unproven.

On October 26, U.S. District Judge Margaret Garnett rejected his request to dismiss the indictment, Courthouse News Service reported. His defense argued that the event contracts involved were not swaps covered by the relevant federal commodities provisions and also raised constitutional objections.

Garnett concluded that Van Dyke had not established that the contracts could not qualify as swaps as a matter of law. The ruling left the prosecution intact without determining his guilt or conclusively resolving how the government would prove its allegations at trial.

The two proceedings address different questions: whether a platform honored regulatory restrictions and whether an individual unlawfully traded using government information. Their overlap puts attention on both access controls and the treatment of event contracts under commodities law, without establishing that the company is responsible for the alleged trader misconduct.

Van Dyke is tentatively scheduled to stand trial on December 7, according to Courthouse News Service. That proceeding will test the prosecution’s evidence and legal theory, while the separately reported CFTC investigation examines Polymarket’s compliance with its settlement obligations.