Democracy Defenders Fund Urges CFTC to Investigate Polymarket Violations of Settlement Agreement to Prevent Fraud and Insider Trading
June 9, 2026
Inaction may reveal the CFTC’s regulatory capture by the Trump family’s business ventures, which has an investment stake in Polymarket.
WASHINGTON, D.C.—Democracy Defenders Fund is calling on the Commodity Futures Trading Commission to begin a formal investigation into whether Polymarket.com has violated its obligations under an existing settlement agreement with the agency and whether its conduct violates the Commodity Exchange Act.
DDF’s letter questions whether Polymarket.com has adequately complied with commitments it made as part of a 2022 settlement with the CFTC that prohibited the company from operating as an unregistered entity in the U.S. If Polymarket.com failed to effectively prevent U.S.-based customers from accessing and trading on the platform, their conduct would be inconsistent with its legal obligations and could expose U.S. market participants to contracts being offered outside the regulatory framework established by Congress.
DDF’s letter points to Army Special Forces soldier Gannon Ken Van Dyke’s reported use of classified government information about a military operation to trade on Maduro-related event contracts through Polymarket, generating more than $400,000 in illicit profits, as a documented example of the platform’s violations. While the CFTC filed a civil enforcement action against Van Dyke, no suit has been brought against Polymarket for failing to prevent or monitor the alleged misuse of its platform or enforce adequate customer identification protocols to verify the location or residence of its customers. By issuing a complaint against Van Dyke without taking action against Polymarket.com under these circumstances, the CFTC sends a message that the CEA is not being enforced fairly and across the board. This is particularly problematic given that President Trump’s son, Donald Trump Jr., both sits on the board of Polymarket and appears to have taken a financial stake in the company through his private equity fund, 1789 Capital.
“When oversight is shaped by the interests of the industry it regulates, the door is wide open to weak enforcement, fraud and abuse,” said Virginia Canter, chief counsel and director of anti-corruption and ethics at Democracy Defenders Fund. “The CFTC should do its regulatory duty and act promptly to ensure that existing rules are being applied fairly across the board and without regard to the Trump family’s business connections.”
“Accountability is a two-way street,” said Chris Swartz, senior ethics counsel at Democracy Defenders Fund. “The CFTC’s investigation of Van Dyke while failing to look into how he had access to Polymarket.com’s prediction market in violation of the 2022 settlement agreement raises serious questions. CFTC’s primary goal is to regulate the commodities markets. Yet, it appears that the CFTC is giving Polymarket a pass. One wonders if that would be the case if the president’s son didn’t sit on Polymarket’s board.”
According to the letter, the potential settlement agreement terms Polymarket violated include:
- Permitting widespread trading on Polymarket.com by U.S.-based customers and failing to implement an appropriate customer identification program.
- Failure to take appropriate steps to prevent U.S-based persons from trading over the market.
- Conducting activities related to commodity option transactions in interstate commerce.
Read the full letter here.
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Democracy Defenders Fund brings together a nonpartisan team to work with national, state and local allies across the country to defend in real-time the foundations of our democracy.
